Amid so much negative news about the effects of the coronavirus pandemic, the grain market has already recorded two consecutive sessions of good increases on the Chicago Stock Exchange given the prospect of better demand from China for products from the United States. After rumors circulated in the market this Thursday (19), the USDA (United States Department of Agriculture) reported new sales of corn and wheat to the Asian nation and of soybeans to undisclosed destinations.
According to the daily report, there were 756 thousand tons of corn – the entire volume of the 2019/20 harvest – 340 thousand tons of hard red wheat – from the 2020/21 harvest – and another 110 thousand tons of soybeans, also from the 2019 harvest /20. Sales of volumes equal to or greater than 100 thousand tons must always be reported to the department.
“Many hope this is the beginning of the promises of major agricultural acquisitions envisaged in the phase 1 trade deal. This occurs as the world continues to fight the coronavirus”, explain analysts from international consultancy Allendale, Inc.
Yesterday, the market had already received the new weekly export sales bulletin from the USDA (United States Department of Agriculture) with good numbers for corn, with sales exceeding 900 thousand tons.
And these new sales are very important for the US market, which is preparing to begin field work for the 2020/21 harvest. And even more so, in view of sales that, in the year to date, present volumes far removed from those recorded a year ago, in the same period.
According to USDA figures, only 29,017.7 million tons were committed throughout the season, compared to more than 41 million in the same period last year. In soybeans, the current volume is 34,999.7 million, while last season, at this time, it was 41,423.0 million tons.
Yesterday, Reuters International had already reported sales of two loads of US soybeans to China, or 120 thousand tons. “The soybean purchases, which were made on Thursday, are for shipments to Pacific ports, probably before the end of April,” said traders interviewed by the news agency.
Market analysts and consultants interviewed by Notícias Agrícolas have been stating, throughout the week, that China will, in fact, have to turn to the American market, mainly soybeans given the low availability of the product in Brazil – since around 70% of the harvest was sold – and Brazilian domestic consumption is also expected to be high in 2020.
“In December 2019 we had a stock of around 4 million tons, if Brazil exports 78 million tons, we should have something close to 1 million tons, that is, a reduction in national stocks of around 75%”, he explains. Marcos Araújo, market analyst at Agrinvest Commodities.
Source: Notícias Agrícolas
