China and swine fever drive soy prices

In talks between US President Donald Trump and his Chinese counterpart Xi Jinping, it is said that the latter country will import substantial quantities of soy from the US. December is now progressing and traders are not yet sure that China will purchase soy from the US.

Resumption of purchases in China
Bloomberg recently announced that China wants to resume imports from the US soon. It would concern a volume of 5 to 8 million tons, but on the other hand it is still not clear whether the import tariff of 25% will be removed.

China would buy the soybeans mainly for state stocks. However, a decision has yet to be made on the final quantity and whether an additional 2 million tons will be bought by commercial companies. These companies could then possibly be reimbursed for the levy.

Soy from the US is not interesting for Chinese traders, because of the started harvest in Brazil. Crop conditions in Brazil are generally good and record yields are expected. However, it is possible that commercial companies from China buy soy in the US, mainly controlled by the government.

Less consumption due to animal disease
In recent days, the rise in the quotations has leveled off again, which is also due to the African swine fever. As a result, it is expected that consumption in the country will be significantly lower. This is also illustrated by the fact that soy prices in China have fallen sharply, while imports have declined.