Soybean Prices Hit Multi-Year High On Increased Exports And Weather Woes 

CBoT Soybean futures soared to multi-year highs this week after export sales data, weather woes that threaten production, and technical buying. 

Reuters, citing a U.S. Department of Agriculture report, said soybean export sales "remain robust" as Mexico and China continue to book large purchases. 

The USDA, in a daily export sales announcement, said private importers sold 374,000 tonnes of the oilseed to China, 152,404 tonnes to Mexico and 132,000 tonnes to undisclosed destinations. The combined deals made for USDA's largest daily soybean export sales announcement since Sept. 8, agency data showed. 

The daily sales announcement came as the USDA also released export data showing net sales of 2.591 million tonnes last week, the fifth straight week in which sales have topped 2 million tonnes. More than 1.5 million tonnes of last week's sales were to China. - Reuters

Traders indicated rising U.S. soybean exports are due to dry weather conditions in Brazil, the world's top soybean exporter, and the number one supplier to China, which has forced a delay in planting. The delay will likely increase demand for U.S. beans in 1Q21 when Brazilian bean shipments usually begin to displace U.S. exports. 

But with U.S. exporters only booking 21.5 million tons of soybeans to China for the first nine months of 2020, about 2 million tons less than the same period in 2017, the probability, overall, that Beijing would fulfill its agriculture pledge under the Phase 1 trade deal remained low. 

As of August, China imported just $10.71 billion worth of U.S. farm products, which means they must purchase another $25.89 billion worth of U.S. farm goods by the end of 2020 to fulfill the deal. 

summary of China's monthly purchases (as of August) of U.S. goods covered by the trade deal, derived from Chinese customs (China's imports) and the U.S. Census Bureau (U.S. exports) data, presented by Peterson Institute for International Economics (PIIE), shows China is severely behind in purchases of not just U.S. farm goods, but also nearly every covered good under the trade agreement. 

Rising soybean prices and increasing exports are great, though President Trump's "greatest ever" trade deal has no enforcement mechanism that works, which makes you wonder if the whole trade deal was just for show ahead of the presidential elections.