Traders watching the soybean export market have known that a slowdown in Chinese buying was only a matter of time. This morning's weekly totals from USDA may be indicating that time has come.
While the world's largest soybean importer accounted for 10.1 million bushels of the week's exports, only 3.9 million of that total came from outright new purchases. The rest were switched from sales previously allocated to "unknown destinations," which the trade assumed were likely bound for China anyway. Indeed, USDA reported decreases of 20 million bushels from sales to unknown destinations, which held down net new bookings to just 7.1 million bushels, a quarter of last week's totals.
The downturn in sales comes at a time of record shipments, mostly to China, which was a furious buyer of 2012 crop soybeans this summer. Some 75% of USDA's total export forecast for the entire marketing year has already been sold or shipped, so the pace of sales will have to slow appreciably to keep the U.S. from running out of beans in 2013. As a result today's report didn't stimulate any panic selling in futures, though prices did lose modest overnight gains.
Sales of wheat were also disappointing at only 8.1 million bushels, well below both trade guesses and the rate forecast by USDA for the marketing year. Wheat posted a technical breakout yesterday on its charts on ideas U.S. prices were finally becoming competitive on world markets after a series of production problems around the world. So far, there's no indication that any business is returning to the U.S., however, with only South Korea accounting for more than one load in the latest week.
Corn sales remain sluggish at 8.2 million bushels, but that was widely expected after a series of poor weeks. Though commitments are at their lowest level since the government began archiving data, that's no surprise, due to tight supplies of exportable corn caused by the drought.
End users were able to buy cheaper feedstuffs from the Black Sea and South America earlier this fall, but those stocks are beginning to run low. South Korea cancelled a tender today for corn, soybean meal and feed wheat due to what it said were high prices.
Corn also got a little support from a separate announcement by USDA this morning that Japan had bought 6 million bushels of 2013 corn, an indication that buyers are waiting to return once production returns to normal.