The soy complex extended its momentous run last week, hitting contract highs for futures connected to the 2020/21 marketing year. A combination of bullish factors supported the move: a tightening balance sheet, a surge in Chinese buying, and ongoing reports of troublesome weather in soybean production regions globally.
China was the big story of the week, with word of more U.S. purchases supporting futures’ hike higher. On Thursday alone, a purchase of 260,000 MT of soybeans was announced, and China’s been an active buyer for the past ten days. As of Sep. 10, total outstanding sales of soybeans were at 30.08 MMT, up by nearly 200 percent from a year ago during the trade dispute.
Global weather is also at the forefront of market concern. Excessive rains in northeastern China could be detrimental to China’s final production number. Estimates of the crop range from 16 to 17 MMT, and imports could be as high as 100 MMT. Although China’s economy appears to be well on its way to recovery (helpful toward spending on agricultural products), demand will also rely on consistent growth in its hog population.
African swine fever has been confirmed in Germany, currently only in the wild boar population in an area northeast of the country’s main commercial hog production region.