This is an article on DTN that quotes the expectations for China to cancel upwards of 2 mmt's of US Soybeans (as we expect..) Still I was struck by this...

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/free/news/template1&product=/ag/news/topstories&vendorReference=4cc08f7f-92c8-437d-b7b8-4bbf769e5028&paneContentId=70109&paneParentId=70043

Companies have found they can get credit from the bank much easier by using soybean import contracts as collateral because it's normal import business. For example, a soybean importer signs a contract to buy beans, takes it to the bank and gets a loan. Often, they sell the beans to another crusher, or if the price is right, they'll cancel the contract and use the funds for other purposes.

"Buying early in the market will let the company get credit earlier and play in the market for a longer time," said Wang, adding that it's hard to estimate the volume of this need because it is mixed with the normal demand.

Another demand pattern shift is that many newly installed crushing facilities are eager to start business. This kind of newly added demand keeps the country's import volume creeping higher. Soybean crushing capacity in China is around 140 mmt, or 5.14 billion bushels, per year. Capacity keeps increasing at a rate of 10 mmt to 15 mmt each year. Each newly installed crushing plant becomes a new buyer.


That's just incredible!!  China alone has the capacity to crush 1.5 US Soybean crops!! 

and growing... 


The article doesn't mention it but Last year we only saw 9 weeks of Net Cancellations.. of those only 2 were Net Net as most Old crop cancellations were rolled into New Crop sales.. So net net ONLY 2 Weeks did we see cancellations last year..


Furthermore, there are others.. such as Mexico that will continue to buy (unless they have already booked.. history says no..) as freight from the US is cheaper (by rail from the US interior..) than waiting in line down south.. shipping by Ocean freight.. transload to rail.. then shipping to interior..


At a price things will change.. but it's fluid..  As of RIGHT NOW.. it's still cheaper to buy US beanies.. NOLA at +105 to +110 the March.. Whereas Brazil is still + 120 to +170'ish.. but those values will fall to +55'ish by March..


NOLA Corn values are firming...    AND we USDA reported the sale of 100,000 mt's of Corn to Spain today..


edit add:  Let's update those soybean numbers above on my spreadsheet.. 28.2 mmt's shipped by last week + the 2 mmt's reported yesterday = 30.2 + 14 (- the 2 just shipped =) +12 = 42.21 mmt's - 2 mmt's EXPECTED to be cancelled (see article above..) = 40.21 + anywhere from 3 to 10.. (3,3,5,10.. so ??)  say only 3 mmt's sold and shipped going forward.. ?? = 43.21 mmt's or 1,587 myn bushels vs USDA at 1,495.. a roughly 92 myn bushel undercount.. and 150'ish carryout becomes.. an Unacceptably LOW 58 myn bushels.. plus more imports.. whatever that becomes..??


Maybe the South ought to plant beanies this year vs corn.. then Quant Bean's... for next year...??? 


No doubt we got a Beanie cliff this year.. but when USDA updates it's balance sheet will we not get a pop.. as Ray J and others "trade the numbers."  ???