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U.S. soybeans are ready for sale

Exporters answer questions about the effect of the COVID-19 pandemic and the Phase 1 trade deal.

Mindy Ward

May 1, 2020

3 Min Read
Soybeans being loaded on to a truck
MORE BEANS: U.S. soybeans are available to ship, according to exporters in the commodity trade industry. Mindy Ward

“U.S. soy is on sale these days,” says Jim Sutter, U.S. Soybean Export Council CEO. “Buy early and buy often.”

If there was ever an incentive for China to purchase soybeans, Craig Pietig, an exporter with Ag Processing Inc., says it is now. Aggressive freight rates combined with soybean prices hovering in the mid-to-low $8 range make the agriculture commodity a deal, he says. “It is a good time for China to trade.”

Soy exporters offered insight on the future of trade and the ag commodities industry during an April USSEC webinar. They discussed what the Phase 1 trade agreement will look like in the latter half of the year, and what changes the industry needs moving forward.

Related: Complete coronavirus coverage

Supply of soybeans

The reality, says former Bunge CEO Soren Schroder, is it will be up to the U.S. and China to figure out how to start the world economy after the COVID-19 pandemic, and agriculture will be front and center.

Exporters are hearing questions surrounding the delays in the Phase 1 trade deal and whether the U.S. will have adequate supply for China moving into the latter part of the year. The trade agreement has a goal of China importing $32 billion in agriculture goods, but much of that has yet to be realized.

The agreement runs a calendar year, and with little purchasing going on in the first half, Schroder expects the bulk buys to start either in August or September. He adds that if all that purchasing power is moved to the back half of the year, it leaves “more than enough dollars for the Chinese to buy” soybeans and other ag commodities.

Schroder who spent what seems like a lifetime in the grain trade working with Continental Grain, Cargill and then Bunge until 2018, remains optimistic about the future of the industry when the world pushes past the coronavirus crisis.

He says exports of soybeans this marketing year may reach the 2 billion-bushel mark from the U.S. With most of the South American soybeans already priced and accounted for, buyers will be looking to America to fill their demands, he adds. “The U.S. will be relied on heavily in the back half of this year,” Schroder concludes.

Other side of COVID-19

Exporters also have been asked about the long-lasting effects of COVID-19 on the U.S. grain supply chain.

Schroder doesn’t think the coronavirus will cause any structural change to how grain and oilseeds are delivered for this year or next year.

Ken Dallmier, exporter with Clarkson Grain based in Illinois, deals primarily in specialty grains, along with food-grade and non-GMO soybeans. He says transparency with customers relied on in the past will need strengthening moving forward.

During the COVID-19 pandemic, his company is communicating directly with export customers about the supply chain. “We need to continue that transparency regarding the U.S. food system with our customers," Dallmier says.

However, Pietig sees a shift on the logistics side of grain marketing toward more automation. He says COVID-19 will force the issue on expediting paperwork exchange from the rail yard to the truck station. How this part of the food sector interacts, both internally and externally, will move to limited in-person contact and greater digital communication.

“It will be about keeping workers and truckers in their trucks to safeguard both customers and employees,” Pietig says. “In the past, some of this [automation] was selective. You chose how electronic you wanted your plant to be. Now, it is more urgent to getting your plant up to date.”

All exporters agreed that the soybean industry is poised to meet the demands domestically and internationally right now and in the future. “We are open for business,” Sutter concludes.

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Covid 19

About the Author(s)

Mindy Ward

Editor, Missouri Ruralist

Mindy resides on a small farm just outside of Holstein, Mo, about 80 miles southwest of St. Louis.

After graduating from the University of Missouri-Columbia with a bachelor’s degree in agricultural journalism, she worked briefly at a public relations firm in Kansas City. Her husband’s career led the couple north to Minnesota.

There, she reported on large-scale production of corn, soybeans, sugar beets, and dairy, as well as, biofuels for The Land. After 10 years, the couple returned to Missouri and she began covering agriculture in the Show-Me State.

“In all my 15 years of writing about agriculture, I have found some of the most progressive thinkers are farmers,” she says. “They are constantly searching for ways to do more with less, improve their land and leave their legacy to the next generation.”

Mindy and her husband, Stacy, together with their daughters, Elisa and Cassidy, operate Showtime Farms in southern Warren County. The family spends a great deal of time caring for and showing Dorset, Oxford and crossbred sheep.

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