Recent trade discussions yielded good news for U.S. soybean growers when at least two Chinese grain buyers were reportedly given the green light to purchase five million tons of soybeans. Today, however, U.S. officials are asking for proof of those purchases.
Earlier reports indicated China would begin purchasing soybeans from the U.S. ‘immediately,’ but experts say that’s a strong word and it’ll likely take a little more time. But, U.S. officials aren’t waiting around for China to change its mind.
“We were told this morning in no uncertain terms, a top U.S. official [from a source who asked to remain anonymous] involved in the U.S.-China talks was calling some U.S. grain companies to ask if China was purchasing grain,” says Jim Wiesmeyer, Pro Farmer Washington Analyst to John Herath on the DC Signal to Noise Podcast.
“[The official] fully expects, out of the White House, that China is very soon, rather than immediately, going to execute some purchases.”
Grain traders want proof that China will follow through on commitments, too.
“This way [they] don’t buy the rumor, [they] buy the fact,” Wiesmeyer says. “You’ll see a pop up [in soybean prices] if we get the confirmation of the purchases but they’re also going to want to see what crop years is going—new crop or purchases or old crop.”
The markets saw a jump in the right direction early this week after trade discussions were publicized, but Wiesmeyer says the market won’t be confident until ships hit the water.
“There are some additional things we need to fill in the blanks [such as if it’s going to be new or old crop],” he adds. “Traders want to see 100% proof of an announcement on purchases.”
Stay tuned for more updates on Agweb.com to see if and when those shipments will hit the water.