Thread: U.S. Posts Record Sale of Soybeans After Chinese Visit

JANUARY 25, 2011, 12:57 P.M. ET.

U.S. Posts Record Sale of Soybeans After Chinese Visit

By TOM POLANSEK

CHICAGO—The U.S. government on Tuesday reported the largest single-day export sale of U.S. soybeans following a visit last week by a Chinese trade delegation.

Private exporters struck deals to sell 2.74 million tons of soybeans for delivery in the 2011-12 marketing year, which begins in September. The U.S. Department of Agriculture announcement signaled continued strong demand in China for the U.S. crop, yet had little sway over future prices as last week's Chinese trade delegation, including representatives from China's largest soybean processors, had announced a series of purchase agreements in ceremonies coinciding with Chinese President Hu Jintao's visit to Chicago.

While the delegation signed the purchase contracts last week, the business doesn't show up in U.S. export data until exporters officially report the transactions to the government.

"The market had already anticipated that we'd be seeing some sales," said Brian Hoops, president of Midwest Market Solutions, a South Dakota commodities brokerage house.

The price of the soybean futures contract for March delivery, the most-actively traded contract, fell 19 1/2 cents, or 1.4%, to $13.85 a bushel at the Chicago Board of Trade. Prices tumbled as traders took profits after prices recently hit more than two-year highs and weather forecasters predicted rain in drought-stressed Argentina, another big soybean exporter.

The previous one-day sales record was 2.2 million tons following a visit from a Chinese trade delegation in 2008, according to the U.S. Soybean Export Council, an industry trade group. China, the world's top soybean importer, typically holds ceremonies to sign soybean-purchase agreements roughly every two years. Total purchases from signing ceremonies last Thursday and Friday were 11.52 million metric tons, according to the council. A metric ton equals 2,204.62 pounds.

China has been buying U.S. soybeans faster than ever to fill the increasing appetite among the nation's middle class for pork and chicken, animals that are fattened with feed made from soybeans. The U.S. has posted record sales to China in the current marketing year. Analysts expect sales to eclipse that record in the coming marketing year. China imports one out of every four rows of soybeans grown in the U.S, which is the world's top soybean exporter.

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