China Implementing New Restrictions on Soybeans
A few days ago I was talking with Gordy from Chiodo Commodities on the air about the corn and soybean markets. He mentioned he saw a report that China was implementing new quality standards for soybeans imported into China. China is a huge market importing millions of tons of soybeans from the United States. The current standard is soybeans can have up to 3 percent foreign material (FM.) That standard is going down to only 1 percent FM.
FM in soybeans is mainly pods, stems and maybe weed seeds. Combines today can do a very good job of harvesting soybeans with less than 1 percent FM. You need to be a combine operator, not just a combine driver. With the proper cylinder speed, concave and sieve settings plus fan speed clean soybeans can be delivered to elevators.
I was wondering what was behind these higher standards so I call Bob Zelenka who is the Executive Director of the Minnesota Grain and Feed Association. Bob said for the most part soybeans in Minnesota are of very high quality and would not have trouble meeting the new 1 percent FM standard. Unless China was doing this with other things in mind like some sort of protection action.
Bob added that soybeans from states farther south in the Midwest have more FM. He said he is not sure if it is weather related but It may be more of an issue for those farmers. Bob is also checking to see how much FM is actually in Minnesota Soybeans. When rail cars are loaded to be shipped to the West Coast and exported every one is graded by grain inspection agencies. So, the FM information should be available.
It will take some time for this to get sorted out and find out what the impact if any will be for Minnesota Soybean Farmers. China is pretty much in control to determine the quality of soybeans they are buying. However, there is no question that soybeans from the United States are the highest quality available to the world market. You would think this would be a huge issue for South America? .