The recent import deals that China signed with the United States to import U.S. soybeans exceeded all expectations and there appears to be no end in sight to China’s appetite for U.S. soybeans. During a multi-city tour of U.S. soybean-related locations last week, Chinese buyers signed 27 contracts worth an estimated $2.7 billion with U.S. soybean export companies.

The contracts signed by Chinese companies account for 70 percent of the 410 million bushels of soybeans U.S. farmers are expected to sell to China during the 2007 market year, more than half of USDA’s prediction for China’s total imports of the commodity in 2006-07. Moreover, industry experts hinted that more contracts will be signed in the coming week or so.

Ma Xiuhong, China’s vice minister for commerce and leader of the delegation, expressed her surprise at the figures. “I had no idea how many contracts would be signed. It’s much more than I expected,” she said.

Bian Zhenzhu, vice president of the China Chamber of Commerce for Import/Exports of Foodstuffs, Native Produce and Animal By-Products, said that market forces will determine the quantity of China’s soybean imports, rather than specific government policy.

The purchase was more than five times the expectations before the sale. “We had an understanding of what we might be looking at (in terms of contract value before the sale),” said George Dixon, chairman of the Illinois Soybean Association. “But they bought about four times that. We were really excited.” Dixon suggested the large purchase was in part a “hedge against bad weather this growing season.”

China also has a significant need for soybeans to supply its growing aquaculture sector. China’s aquaculture industry consumes 150 million bushels of soybeans annually. “If (aquaculture) continues to grow in the next 10 years as it has the last 10 years, 20 percent of U.S. soy meal could go to aquaculture worldwide,” said Eric Niemann, chairman of the United Soybean Board. “We’re very confident we’ll be able to be a consistent supplier as we have been in the past.”

A European Commission (EC) report, based on the latest 10-year projections published by the major forecasting institutions, indicates that world soybean stocks are at record levels and oilseed production and consumption are expected to rise by 2.3 percent annually. China could double its oilseed imports to around 50 million tonnes by 2015-16 – around half of all global oilseed trade. The EU will continue as the second-largest importer, but import forecasts vary between analysts from 13-35 million tonnes, making it difficult to form a precise estimate, according to the EC report.

Meanwhile, the EC report said that over the next decade, oilmeal consumption and production are expected to rise by 2.3-2.7 percent. Oilmeal prices will fall by around 5-10 percent on levels from the past decade. The EU likely will expand imports by 2-4 million tonnes to 25-30 million tonnes, according to the report.

The Associated Press reports that an announcement that a fungus called Asian soybean rust had been found in southern Iowa earlier this year may not be totally true. On May 22, state officials said the single leaf infested with the destructive fungus must have been brought into Iowa from outside the state, perhaps to make people think it had grown in Iowa. The investigation has been turned over to the federal government.

USDA’s Office of the Inspector General declined to name the person who submitted the sample. Iowa Secretary of Agriculture Bill Northey said the sample was submitted to IowaState’s Plant Disease Clinic and USDA confirmed it tested positive for Asian soybean rust.

Officials with the state agency traveled to the farm and examined the bin and the fields the leaf reportedly came from, as well as surrounding fields. They found no evidence of rust. “If it was represented to come from a field that it did not come from, then it’s doubtful that it was a mistake,” Northey said.

Officials continue to stress that the infected leaf represented no risk to the state’s 2007 soybean crop, as the fungal spores that cause the disease cannot survive freezing temperatures and require green leaf tissue to sustain itself.

The Census Bureau reported soybean crushings in April totaled 3.94 million tonnes. The figure was below the average survey estimate of 3.98 million tonnes, down from March’s 4.24 million tonnes, but above last year’s 3.69 million tonnes. The previous week, NOPA reported a crush for April of 3.77 million tonnes.

Soyoil stocks dropped to 1.49 million tonnes from March’s 1.52 million tonnes. The average of survey estimates was 1.5 million tonnes. Soymeal stocks were reported at 298,000 tonnes, right in line with March’s total but below the average estimate of 315,000 tonnes.

The soy complex was mostly higher on May 24 reflecting continued speculative buying. Soyoil rallied further to new contract highs that put the nearby month at the highest level since June 1984. Soybean oil was the stronger product yesterday on oil/meal spreading with soybean oil garnering support from palm oil surging to new highs amid indications that Asian vegoil buyers were rushing into the market. Expected tight supplies and the strengthening of the Brazilian Real have helped push prices higher. Futures prices for 2008 corn and soybean are less favorable for corn production relative to soybeans than what existed ahead of 2007 plantings, suggesting that soybeans should gain back some acres next year. This, along with huge U.S. carryouts lessens the importance of increasing Brazil’s soybean area. July bean futures closed up $175, finishing at $295.88; August was $1.56 higher, closing at $298.54; and September was up $1.47, ending at $300.74. July meal was down $1.87 closing at $239.42; August was $1.98 lower, finishing at $241.51; and September lost $2.31 to close at $243.39. July oil closed $15.21 higher to finish at $784.40; August was up $15.21, closing at $789.69; and September gained $15.87, ending at $795.86.

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