CBoT soybean futures prices are falling this morning after hitting a five-week high. Market participants are realizing that China needs fewer soybeans since its ASF crisis and that Brazil is expecting a record harvest.
Although Beijing had promised to increase soybean purchases in the US in the recently agreed "phase-one" deal, the statement by some US diplomats that China will buy USD 40-50 billion worth of US agricultural goods is considered completely unrealistic by experts. USD 40-50 billion is considered completely unrealistic by experts.
In addition, the expectation of a record harvest in Brazil is likely to cause an oversupply on the world market, which should put pressure on prices.
Chinese importers bought two shiploads of US soybeans yesterday, which are exempt from export duties. As African Swine Fever (ASF) is still spreading in China, market participants expect import demand from there to remain manageable. Since the outbreak of the ASF epidemic last year, the Chinese pig population has halved.
Source
HANSA Terminhandel
