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No Big Deal til there’s Beans on Boats

This week China made its first significant purchase of soybeans in the 2018/2019 marketing year – roughly 50 million bushels if my Friday night math is correct.

Some headlines note that this week’s purchase is nearly a record for a single day’s purchase. But, clearer heads note that this purchase is really just a drop in the bucket. China would need to make the same sized purchase every day for two weeks straight to make up for the missed sales already this marketing year (spitballing this number).

Also, note that the sale does not guarantee that the beans will ever actually make their way to China, that is why we have the FAS reported export sales, and the GIPSA reports which reports beans actually leaving the country on barges. Importantly, it is not uncommon for FAS reported sales to be later cancelled.

In short, this week’s sale is an encouraging sign, but not enough to keep a floor on the soybean market price.

Or, this new development is No Big Deal til there’s Beans on Boats1

  1. Excellent phrase appears to be coined by Jay Bryson at Wells Fargo



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