This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

The soybean market has been stuck in a pattern of wash, rinse and repeat. The pattern has been that we get rumors of more sales to China and the market bounces, then we either see a few sales confirmed by USDA and the market trades higher, or we do not get any confirmation of sales and the market trades lower. The market knows we are not going to get to 12 million metric tons by the end of the year. Treasury Secretary Bessent said this week that “China is on pace to meet its pledge to buy 12 million tons of U.S. soybeans by the end of February.” It is not lost on anyone that the White House and Bessent himself had earlier said the 12 million metric tons would be bought before the end of the year, and now the deadline has been pushed out to February. It is also worth noting that the Chinese side has never confirmed either the pledged amount or the timeline for the purchases. They have bought a total of 2.845 million metric tons so far, leaving them with 9.155 million metric tons more to reach the 12 million metric tons alleged commitment. For all these purchases, they have paid a premium over what they could buy South American beans for, so they are certainly trying to generate some goodwill with the administration by making any purchases at all.

Bloomberg also reported that “Traders expect Chinese state-owned importers, including Cofco, to step up buying of U.S. soybeans in coming weeks, in line with the deal. The timing and scale of shipments remain uncertain.” So it looks like we are destined to stay in this cycle for longer. U.S. beans are priced almost equal to Brazilian beans landed in China now, so the only difference in price is the additional 10% tariff that has to be paid on U.S. beans. There is no big weather threat or story in South America right now to drive the market direction, so it is all about China. If we see more big sales to China, the market is going to rally. If we do not, we are going to go lower. At the end of the day, even if they reach the 12 million metric tons tomorrow, the balance sheet does not change that much since USDA still has a pretty big export number filled in, but the market is going to react to big sales (or lack thereof).

We get the USDA December supply and demand update today, Dec. 9, at noon. Historically, USDA does not make many changes on the December report, but they did last year, and after the extended government shutdown threw so many things into flux, I would not be surprised to see more changes than what we have seen in the past. Markets are going to keep watching China and seeing if there are any threats developing in South American weather. The market expects a very slight decrease in corn carryout and a small increase in bean carryout on today’s report. The market is also looking for very small adjustments to the South American crop size on this report.