Market Intel

Beans to China:

Virtual Reality at Work?

“Hard numbers for actual U.S. soybean exports to China remain hard to know,” sources tell Market Intel.

Two factors stand out…

First, last month’s Trump-Xi meeting resulted in the White House news that China had agreed to buy 12 million tons of U.S. beans by year-end and 25 million tons in each of the next three years. However, China-based news reports note that the Chinese government has not yet publicly committed to renewing such heavy purchases, although it did suspend retaliatory tariffs. In any case, bookings are lagging for December and January shipments.

Second, China made huge purchases of South American beans earlier this year. China-based reporting points to current significant oversupply at ports and in government-controlled stockpiles. Crushers are coping with negative margins.  

Soybean meal: Soft or fuzzy soy trade numbers are harder for the market to digest, but that doesn’t prevent them getting baked into prices. SBM spot basis prices are up approaching this year’s highs. Worth keeping in mind that Brazil mainly exports beans and Argentina meal. Other soy protein products prices are stronger and canola meal is up a bit from its recent lows.

Amino acids: Sources report “no whisper in the wind” for a final resolution of the European Union’s lysine anti-dumping ruling against China. Meanwhile, the primary swine AA — including tryptophan and threonine — are in good supply with prices continuing to soften into Q1. DL methionine prices are steady.  

Vitamins: Likewise, there are good supplies of most vitamins, with vitamin A prices close to bottoming out, but with room for decline in prices of vitamin E and vitamin D₃.

The cost of micro ingredients coming from China may be softening a bit thanks to lower ocean freight rates.

Trace minerals: There’s lower pricing for both copper sulfate and tribasic copper chloride (TBCC). Zinc sulfate prices are steady, even with fertilizer season closer.

Fat products: Veg-animal blend prices are steady, down from their highs this summer.

Blood products: Prices this year are not following the usual holiday uptick, even with Thanksgiving in the offing. Relatively low cost SBM and lower milk prices

are keeping a lid on. Meat processing labor challenges appear to less problematic.

P & K: Prices for phosphates are steadier along with potassium chloride (KCl) and magnesium oxide (MgO).

Distillers: DDGS prices may be creeping up. Basis and futures prices are up for corn, and there’s higher VOM mycotoxin in some parts of the Tri-State.

Wheat midds: There’s been a significant drop in prices — down $20-25 per ton — as processing has geared back up from earlier shutdowns.

Soy hulls: Prices continue to weaken with ready availability. Sources suggest prices are “firming the drop” of the past few months.

Over the horizon… These days there’s a lot more on-farm grain storage capacity. Pig producers who grow their own corn appear to be tucking more away for later use.

Available now: November WASDE Report.

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