Phase One, hog rebuilding have fueled China’s buying spree
What have been the main drivers behind China’s recent corn and soybean buying spree?
Iowa Soybean Association CEO Kirk Leeds, who has been on 25 Chinese trade missions over the years, says it’s a combination of factors.
“I think some of it clearly is related to Phase One and the commitments they made,” Leeds says. “Certainly, I think, there’s some political value in making the purchases.”
Leeds says China’s own crop shortfalls are also a factor. But he says the biggest demand driver is the rebuilding of China’s hog herd.
“With the consolidation and elimination of a lot of the backyard hog production into these very high-tech, modern, large livestock facilities, they’ve just seen an explosion in demand,” he says.
China’s soybean purchases have slowed some in recent weeks. Leeds says they may have what they need for now.
“I think there’s probably a pause. But depending on how things progress, both in China and Brazil, they may continue to make some purchases yet for the next couple of months.”
Leeds says Chinese buyers may also be waiting for a further dip in soybean prices before they resume purchases.