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CHICAGO Jan 6 U.S. soybean export sales slid to
their lowest in the current marketing year last week, the U.S.
Department of Agriculture said on Friday, fueling concerns among
analysts and traders that formerly sizzling demand is cooling
Exporters in the week ended Dec. 29 struck deals to sell
87,500 tonnes of U.S. soybeans for delivery in the 2016/2017
marketing year, which ends on Sept. 1, according to the USDA.
That was down 94 percent from the prior four-week average.
Corn export sales were also a marketing-year low.
Traders had expected soybean sales would reach 800,000 to
1.2 million tonnes and said that U.S. prices remained
competitive on the global market. Still, soybean futures
fell 1.7 percent on concerns about a slowdown linked to
increased competition for business from South America and strong
sales earlier in the year.
"While holiday timings should suppress trade, an 88,000
metric tonne weekly sales total was eye opening," said Terry
Linn, executive vice president for broker Linn Group in Chicago.
"It was an ominous reminder to the trade that our export program
is on a clock."
Some traders cautioned that more than one week of poor sales
was needed to draw conclusions about dwindling U.S. sales by
global traders, such as Bunge Ltd, Archer Daniels Midland
Co and Cargill Inc.
However, others said the United States was grappling earlier
than usual with a seasonal shift of export demand to Argentina
Last week's U.S. sales were "a solid indicator that South
America is taking control of the world export market," said Karl
Setzer, risk management team leader with MaxYield Cooperative in
"Bookings will be much less than what we have become
accustomed to seeing," he added.
Large sales of U.S. soybeans earlier in the marketing year
indicate that demand was front loaded and the latest sales could
be the start of a slowdown, analysts said.
On Friday, the USDA changed destinations for more than
850,000 tonnes of U.S. soybeans that had been previously sold
and earmarked for unnamed buyers. Top importer China took
626,000 tonnes switched from "unknown destinations."
Overall, exporters have yet to ship 5.1 million tonnes of
U.S. soybeans already sold in the current marketing year to
unnamed buyers, up 34 percent from a year ago. That means
importers could continue to turn to soybeans labeled for
"unknown destinations," instead of making new purchases.
"We're going to see an increasing amount of this phenomenon
where importers are working off of old contracts," said Ken
Morrison, publisher of a commodity newsletter in St. Louis.
"They have less of a need to make purchases from the U.S."
(Reporting by Tom Polansek, Julie Ingwersen and Mark Weinraub;
Editing by Dan Grebler and Lisa Shumaker)