Chinese importers of US soybean are reportedly considering canceling their orders for December and January shipments.
The consideration came after a steep rally in Chicago futures. Such applies to those buyers who bought cargoes but did not settle the futures price yet.
Experts in the field noted that the move could be one of the earliest indicators of slowing demand from the world’s second-largest consumer market.
Chinese importers continued their buying spree for the agricultural commodity during the last five months.
The unprecedented shift in prices came with the dry weather currently experienced in the top producer Brazil.
The adverse weather provided support for Chicago futures, which already rallied by a quarter since the start of the crop season in September.
For the record, China is the world’s largest soybean importer, accounting for about 60% of the total production.
The agriculture commodity is vital in the country’s poultry and hog sectors as it could be converted into animal feed.
This year, the East Asian nation upgraded its orders to stimulate its pig herd, which has been largely incapacitated by the African Swine fever, which wreaked havoc in its borders from 2018 to 2019.
Similarly, it is also crushed for oil and thus becomes an important component for cooking.
One imperative occurrence that contributed to the surge in soya bean imports is Phase 1 of the trade deal which it signed with the United States.
The agreement stipulated China’s need to hasten its imports of agricultural commodities from American farmers.
Adding support to the robust import is the low price margin due to the oversupply ignited by the sudden emergence of the coronavirus pandemic.
Corn Prices Remains Volatile
Along with the lukewarm reports from China, farm markets closed mostly lower for the day.
January soybean contracts recorded a ¼-cent reversal after settling at $11.9 ½ per bushel. O the other hand, contracts for March hiked by 3/4 cents at $11.3 1/2.
For a brief context, the product’s price fell by $8 per bushel during the peak of the trade war. Such a price already offered significant relief for farmers.
On the other hand, corn is not performing better now that the harvest period is over. The commodity failed to make the necessary advances in price during the week.
December corn finished with a 3/4 –cent decrease while March contracts followed the downward trend after slashing the same amount per bushel.
The United States currently observes Thanksgiving Week and trading on some farm commodity is steady throughout the day.