China bought U.S. ag goods ahead of new tariff talk

The USDA says China did buy U.S. ag goods last week ahead of the most recent round of trade tensions. China was the top weekly buyer for U.S. soybeans, sorghum, and upland cotton, also purchasing U.S. pork. Hong Kong was the big weekly buyer for beef, but it’s unknown how much, if any, of that 8,300 tons will end up in mainland China. President Trump threatened new tariffs on Chinese imports late last week and in response, China stopped purchases of U.S ag goods. The USDA’s next set of supply and demand estimates is out August 12th.

Overall, soybean, soybean meal, and wheat export sales for the week ending August 1st were within pre-report estimates, while corn was far short of expectations and soybean oil topped analysts’ projections. Physical shipments of beans, corn, and sorghum remain short of what’s needed to meet the USDA’s guess for the 2018/19 marketing year and wheat is ahead of the previous marketing year’s pace. The 2019/20 marketing year started June 1st for wheat and August 1st for cotton and rice, while 2018/19 runs through the end of August for beans, corn, and sorghum and the end of September for soybean products.

Wheat came out at 487,700 tons (17.9 million bushels), up 27% from the week ending July 25th and 17% higher than the four-week average. The Philippines purchased 76,600 tons and Mexico bought 71,400 tons, while Brazil canceled on 30,000 tons. A couple of months into the 2019/20 marketing year, wheat sales are 344.9 million bushels, compared to 276.1 million towards the outset of 2018/19.

Corn was reported at 42,600 tons (1.7 million bushels), down 70% from the previous week and 82% lower than the four-week average. Saudi Arabia picked up 59,300 tons and Mexico purchased 42,900 tons, but unknown destinations canceled on 134,800 tons. With roughly a month left in the 2018/19 marketing year, corn sales are 1.966 billion bushels, compared to 2.359 billion late in 2017/18. Sales of 197,000 tons (7.8 million bushels) for 2019/20 delivery were mainly to Mexico (92,300 tons) and Honduras (37,500 tons).

Sorghum sales were 38,800 tons (1.5 million bushels), China bought 25,000 tons and Mexico picked up 13,700 tons. At this point in the marketing year, sorghum sales are 66.6 million bushels, compared to 198.7 million a year ago. Sales of 25,000 tons (1.0 million bushels) for 2019/20 delivery were to China.

New crop rice exports were 97,700 tons. Mexico purchased 66,700 tons and Haiti bought 15,200 tons, with 460,200 tons of sales outstanding on July 31st carried over into the new marketing year. Accumulated old crop sales totaled 3,078,300 tons, up 9% from 2017/18. 2019/20 rice sales are 686.5 million tons, compared to 339.4 million early in 2018/19.

Soybeans were pegged at 101,700 tons (3.7 million bushels), 29% less than the week before, but 25% more than the four-week average. China picked up 126,600 tons and the Netherlands purchased 112,900 tons, but unknown destinations canceled on 307,500 tons. So far, this marketing year, soybean sales are 1.794 billion bushels, compared to 2.149 billion this time last year. Sales of 318,300 tons (11.7 million bushels) for 2019/20 delivery were primarily to unknown destinations (290,500 tons).

Soybean meal came out at 92,200 tons, 19% below the prior week, but 19% above the four-week average. The Philippines bought 25,500 tons and Mexico picked up 19,400 tons, while unknown destinations canceled on 8,000 tons. Cumulative soybean meal sales are 11,676,500 tons, compared to 12,031,500 a year ago. Sales of 18,600 tons for 2019/20 delivery were mostly to Panama (14,000 tons).

Soybean oil was reported at 31,800 tons, a significant jump from both the previous week and the four-week average. South Korea purchased 23,000 tons and Colombia bought 5,000 tons. 2018/19 soybean oil sales are 875,600 tons, compared to 1,027,000 in 2017/18.

New crop upland cotton sales were 179,500 bales. China picked up 60,100 bales and India purchased 28,700 tons. A total of 7,372,800 bales outstanding at the end of 2018/19 were carried over into the new marketing year. With exports of 272,200 bales for the period ending July 31st, accumulated sales were 13,158,900 bales, down 11% from the previous marketing year. 2019/20 sales are 7,445,600 bales, compared to 8,245,100 early in 2018/19.

Net beef sales totaled 22,000 tons, an increase of 94% on the week and 41% from the four-week average. The listed buyers were Hong Kong (8,300 tons), Japan (4,500 tons), South Korea (2,400 tons), Canada (2,200 tons), and Mexico (1,400 tons).

Net pork sales totaled 13,700 tons, up 55% from the week before, but down 13% from the four-week average. The reported purchasers were Canada (4,100 tons), Mexico (2,300 tons), South Korea (1,500 tons), China (1,400 tons), and Australia (1,300 tons). Sales of 400 tons for 2020 delivery were to Japan.