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Bulls are happy to hear China plans to buy more U.S. soybeans

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Is it enough to keep the bulls buying and bears at bay?

There was some initial confusion, but from what I understand, China is expected to purchase another 5 MMTs of U.S. soybeans, on top of the estimated 5 MMTs they have recently purchased. Even though it's fantastic to see China back in the U.S. market, I'm just worried it might not be enough to keep the bulls buying and the bears at bay?

Keep in mind, Brazil has now harvested about 15% of their new-crop bushels and supply is moving to the ports and becoming more readily available. Meaning the window of opportunity for U.S. exporters is starting to more rapidly close. We certainly don't want to scoff at another 5 MMT purchase, but with the U.S. balance sheet busting at the seams it will still be tough to paint a bullish picture.

The good news is Brazil's crop has faced some weather headwinds. Rather than Brazil harvesting another new record, like the USDA was forecasting at 122.0 MMTs, it looks like their production is going to pull back to around 112.0 to 116.0 MMTs. Bulls are thinking there could be logistical concerns and restraints associated with getting the crop out of the country so perhaps U.S. exporters could see unusually late interest in supply, especially if the Chinese are trying to show good faith.

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The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.

 

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