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China buys more U.S. soybeans on 2nd day of visit

Agriculture.com Staff 04/07/2006 @ 3:30pm

After announcing purchases of nearly 5.0 million metric tons of U.S. soybeans the day before, a delegation of Chinese importers signed contracts on Friday for an additional 1.86 million metric tons with private U.S. exporters.

At the Minnesota state capitol, the Sino-U.S. Soybean Industry Exchange, made up of 13 Chinese soybean processing companies, representing 67% of all Chinese soybean imports, signed purchasing contracts with four different U.S. companies.

Within a 24-hour period, the Chinese delegation purchased close to 6.0 million metric tons of U.S. soybeans, nearly two-thirds of what they ship for a year.

With this week's purchases, China buyers have committed to 15.5 million metric tons of U.S. soybeans in the 2006-2007 marketing year. This brings the U.S. soybean export activity with China to a near equal level compared to a year ago.

John Roach, Roach Ag, said the Chinese purchases are positive, but doesn't expect Monday's market to react much to them. "We need more soybean business. Exports are down and we have lots more inventory. Hopefully, these buys stabilize the market. What we don't know is what kind of pricing the Chinese made. Still, the bottom line is farmers still have a lot of beans in storage."

In general, USDA reported last month that soybean on-farm stocks figures are bigger than last year.

Meanwhile, USDA, in its monthly supply/demand report on Monday is expected to make no cuts in U.S. soybean ending stocks for 2005-2006, Roach said. "They (USDA) may even raise soybean ending stocks. Still, not much impact with this report foreseen."

For corn, the supply/demand report is expected to show increased usage of corn for ethanol, feed, and exports. "This should cut the U.S. corn carryover," Roach said.

After announcing purchases of nearly 5.0 million metric tons of U.S. soybeans the day before, a delegation of Chinese importers signed contracts on Friday for an additional 1.86 million metric tons with private U.S. exporters.

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