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China buys U.S. ag goods ahead of G20

The USDA says China made significant purchases of U.S. agricultural goods during the week ending June 20th. Beijing bought more than 10,000 tons of U.S. pork, nearly 80,000 tons of soybeans, and almost 50,000 tons of sorghum for this marketing year, in addition to more than 60,000 tons of U.S. beans for next marketing year. Trade with China has fallen off sharply because of a tariff battle with the U.S., but could improve if there’s progress at a scheduled meeting between President Xi and President Trump Saturday at the G20 summit in Japan.

Overall, wheat export sales were a little big larger than what analysts were expecting ahead of the report, but corn was toward the low end of estimates and soybeans fell short of projections. Physical shipments were neutral for beans and wheat, bearish on corn and sorghum. The 2019/20 marketing year for wheat got underway June 1st, while 2018/19 runs through the end of August for beans, corn, and sorghum and the end of September for soybean products.

Wheat came out at 612,000 tons (22.5 million bushels). The Philippines purchased 116,000 tons and Guatemala bought 88,300 tons. Less than a month into the 2019/20 marketing year, wheat sales are 255.3 million bushels, compared to 204.0 million towards the outset of 2018/19.

Corn was reported at 294,900 tons (11.6 million bushels), up sharply from the week ending June 13th and 7% higher than the four-week average. Japan picked up 166,500 tons and Mexico purchased 139,000 tons, while unknown destinations canceled on 97,300 tons. With less than a quarter left in 2018/19, corn sales are 1.919 billion bushels, compared to 2.254 billion late in 2017/18. Sales of 110,100 tons (4.3 million bushels) for 2019/20 delivery were mainly to Mexico (84,000 tons) and unknown destinations (16,500 tons).

Sorghum had a net reduction of 3,400 tons (-100,000 bushels), with the sale of 49,600 tons switched from unknown destinations to China, with an additional cancellation of 1,000 tons. At this point in the marketing year, sorghum sales are 61.4 million bushels, compared to 203.1 million a year ago.

Soybeans were pegged at 168,200 tons (6.2 million bushels), down 71% from the previous week and 61% lower than the four-week average. China bought 79,600 tons and Mexico picked up 58,200 tons, while unknown destinations canceled on 38,700 tons. So far, this marketing year, soybean sales are 1.751 billion bushels, compared to 2.085 billion this time last year. Sales of 319,600 tons (11.7 million bushels) for 2019/20 delivery were primarily to unknown destinations (98,000 tons) and Mexico (92,400 tons).

Soybean meal sales were a new marketing year low at 28,700 tons. That’s a decline of 74% from the week before and a drop of 78% from the four-week average. Venezuela purchased 25,000 tons and Honduras bought 15,700 tons, but Italy canceled on 38,000 tons. Cumulative soybean meal sales are 11,256,700 tons, compared to 11,375,200 a year ago. Net sales of 41,000 tons for 2019/20 delivery were mostly to Italy (38,000 tons) and Guatemala (1,600 tons).

Soybean oil came out at 19,200 tons, significantly more than the prior week and 28% above the four-week average. Unknown destinations picked up 10,000 tons and South Korea purchased 5,000 tons, while Canada canceled on 400 tons. 2018/19 soybean oil sales are 785,200 tons, compared to 931,300 in 2017/18.

Net beef sales totaled 15,100 tons, down 16% on the week and 17% lower than the four-week average. The listed buyers were Japan (5,700 tons), South Korea (3,000 tons), Mexico (1,700 tons), Hong Kong (1,400 tons), and Canada (1,200 tons). Sales of 2,000 tons for 2020 delivery were to Mexico (1,400 tons) and Japan (600 tons).

Net pork sales totaled 29,700 tons, an increase of 51% from the previous week, but a decrease of 9% from the four-week average. The reported purchasers were China (10,400 tons), Mexico (9,900 tons), Japan (2,300 tons), South Korea (1,800 tons), and Canada (1,600 tons).