(DesMoines Register) – China bought 110,000 metric tons of corn and 285,000 metric tons of soybeans early Wednesday, generating more talk that the Chinese are wary of weather and supply disruptions in South America and will turn more heavily toward U.S. grains.
The sale helped soybeans gain 8 cents per bushel Wednesday on the Chicago Board of Trade, closing at $13.13.
Soybean prices have rallied almost 15 percent since Jan. 1, boosted by news of heat and drought in Brazil and increased acres for corn planting in the United States this spring.
“Of that soybean purchase, 175,000 metric tons were from the old 2011 crop in storage,” said Don Roose of US Commodities in West Des Moines. “As for corn, China’s domestic price is up to around $9.75 per bushel, which is just off their all-time highs. So that would tell you they might be running into supply shortages.”
Even before the purchases this week, China had become a bigger factor in U.S. corn purchases, with 2.6 million metric tons purchased since the marketing year began Sept. 1, compared with 313,000 metric tons this week last year.
China also has picked up the pace of its soybean purchases, which now stand at 16.2 million metric tons since Sept. 1 vs. 19.5 million metric tons this time last year.
The recent visit of a Chinese trade delegation to Iowa and the signing of new soybean sales agreements have firmed confidence that China will continue to be a strong customer. In recent years, it has bought 60 to 70 percent of U.S. soybean exports.
Soybeans have taken on a new edge after the U.S. Department of Agriculture last week put the carryover surplus at no more than 220 million bushels, considered a very tight supply.
The strong performance of soybeans this year has caused some to question estimates of a widespread swing from soybean to corn planting this spring.
“With higher soybean prices, beans are beginning to look better, especially for those that would really rather be in a rotation anyway,” broker Tomm Pfitzenmaier said Wednesday.
