Anybody going on vacation knows the feeling of a mad scramble to tie up loose ends. Purchasing agents in China were apparently feeling that pressure last week, as they prepared for the long Golden Week holiday. Chinese buyers inked deals for 37.7 million bushels of soybeans ahead of their break, causing total sales for the week to hit 47.9 million bushels.
Traders had already suspected the tally would be good, but the final numbers far exceeded expectations. Moreover, the total was three times the rate forecast through the end of the marketing year, which still has eleven months to go. Indeed, 82% of USDA forecast for the crop year, 1.055 billion bushels, has already been sold or shipped, by far the fastest pace on record. That virtually ensures the government will raise its forecast in next week's supply and demand report Oct. 11.
China was also an aggressive shipper of beans, loading out 62% of the week's total of 43.2 million bushels.
November futures were already rallying into release of the report and doubled gains afterward. However, futures were able to break through session highs after the start of pit trading, though November tested the top of the down-trending channel that's been in place over the past three weeks.
Corn and wheat benefited from the bump in beans, following November to modest gains. But futures were held back by export sales that were lackluster at best.
While corn's total exceeded expectations, the trade wasn't looking for much. Sales of 12.9 million bushels were below the rate forecast by USDA, though strong summer business is still being shipped out. In fact China took another 4.25 million bushels. Trouble is, new sales are coming on slowly as buyers search for alternatives.
Customers for wheat are still finding those alternative sources. Sales slipped to just 11.3 million bushels, as the U.S. continues to be shut out of the Middle East. While the Philippines took a couple of loads, most buyers are taking small amounts, suggesting hand-to-mount buying remains the pattern.