U.S. Export Sales were viewed as bullish this week, as Mexico, Japan, and China played an active role in the U.S. grains space.
U.S. Export Sales were friendly, shares Greg McBride, commodities broker with Allendale.
“The numbers, however, were a marketing year low for soybeans and wheat, showing China may be slowing down their purchases, even though they purchased a little over one million metric tons last week. They only purchased about 570 tons of corn.”
McBride says corn producers must be “cognizant” of a slow down in demand from China. He adds, there is no reason to be alarmed.
“Is China satiated or will they have to come in and buy?” McBride asks. “Over the last two or three years, their domestic production has been down. They need to recoup that. Domestic corn prices there are high, so they’re getting a pretty good bargain when they buy U.S. corn.”
McBride says, “The other thing to watch is going to be whether or not there will be issues with South American production.”
“They have gotten rain, (but) it has not done anything to improve soil moisture. All they have done is slow down the drying effect, which could be beneficial to us when it comes to sourcing corn and beans for China again,” McBride says.