USDA announced a huge new-crop bean sale to China this morning -- 1.752 million metric tons. With the fundamental outlook of the market, it's a little surprising China moved to make the purchase so early in the process. They've got a lot of time to sit back and wait for the price to get better before locking in a price...
... but when was the last time China really "locked in" a price? Don't forget, we've (you, me and everyone else that watches the bean market) complained for years about China's import policies. What will China do if bean prices do move lower (to sharply lower)? They'll cancel the purchases and buy them again later at a lower price. Still... it is surprising to see China make what appears to be a "value buy" at this time of the year with a potentially big-time price-negative growing season just a couple of weeks away.
There's more news on China -- In its annual "buy-America" tour, the country inked a deal to buy a bunch of beans in 2006. I don't do this very often, but here's a peek at an item from our daily electronic service, "Pro Farmer Today:"
"CHINA SIGNS AGREEMENTS FOR U.S. BEANS, SOYOIL... A Chinese trade delegation visiting the U.S. ahead of U.S.-Chinese trade talks in Washington D.C. next week signed agreements to buy 4.98 MMT of U.S. beans and 20,000 MT of U.S. soyoil in 2006. The agreements are non-binding, but are a goodwill gesture that China will keep buying U.S beans and soyoil."
