Prices have risen £1-2 in the last week. On Friday we saw the latest USDA report. The report increased global soya production by 1 million tonnes and increased end stock by 0.3 million tonnes to 96.7 million.
South American production figures were unchanged. Argentinian farmers are still not selling their beans, so this is keeping prices firm. Weather is favourable in South America so there could be larger crops on the way. Brazilian beans are much more competitive at this time of the year, which could limit the amount of Chinese purchases that we ultimately see. The Brazilian harvest is just kicking off, and early signs suggest decent yields and no signs of anything to worry about.
China and US signed the phase 1 part of the trade deal yesterday. The U.S reduced tariffs on $120 billion in Chinese goods to 7.5% from 15%. In return China have agreed to $80 of agricultural purchases over the next 2 years. No less than $12.50 billion in the first year and no less than $19.50 billion in the second year. There is still uncertainty how this will work and the actual quantity of soya beans that China will buy from the US.