President Donald Trump said farmers are going to be “very happy” that China pledged to buy several million metric tonnes more of US soybeans in the months ahead.
Some growers, though, want proof of large purchases and continue to unload inventory when they can.
Iowa farmer Bill Shipley, who grows corn and soybeans on roughly 1,300 acres, sold about a 10th of what he was holding from his recent harvest about a week ago, when the futures market and his local price rose.
A nearby processing plant also had a long line of farmers waiting to deliver truck loads, he said.
Part of the reason the market hasn’t jumped on what should be positive news from China may be that farmers are moving supplies and the US has just “too many beans,” Shipley said.
US inventories are expected to double in the year through August amid a large crop and after China shunned American supplies during the second half of 2018.
The Asian country is expected to purchase 5mn tonnes of US soybeans, Trump said on Thursday.
That would be on top of an estimated 5mn tonnes bought in the weeks after Trump met with his counterpart Xi Jinping in December in Argentina.
China was said to make purchases on Friday.
Soybeans for March delivery closed at $9.17 3/4 a bushel in Chicago Friday, down 0.8% from a week earlier.
That comes after Thursday’s announcement of US sales to China, and amid analyst forecasts reducing the size of the soybean crop that Brazil recently began harvesting.
The market is reflecting farmer sales along with the sense that the US is “not getting back much of what we lost, at least not at the present time,” said Mark Schultz, chief market analyst for Northstar Commodity Investment Co.
Illinois farmer Austin Rincker, who grows corn and soybeans on almost 2,500 acres in central Illinois, sold about 5% of his 2018 soybean harvest in the last three weeks amid the rally.
He said news of the sales to China and the progression in talks is “very encouraging.”
“It’s for sure not enough,” said Lindsay Greiner, who raises corn, soybeans and hogs in Keota, Iowa, and is president of the Iowa Soybean Association. “Yes, there is some skepticism whether these sales are going to increase.”
A crop of soybeans at a farm in Hickory, North Carolina. China is expected to purchase 5mn tonnes of US soybeans, Trump said on Thursday.
