June 22, 2004

Argentina Could Be Next In China Soy Situation

China has raised contamination issues with a cargo of Argentine soybeans. It is not clear yet whether the cargo will be rejected or allowed to unload.

Meanwhile, talks were held today between Chinese and Brazilian representatives in an effort to try and find a solution to the soy situation. Some 23 Brazilian exporters had been blacklisted and 5 cargoes of Brazilian soybeans were rejected by China due to the presence of the chemical carboxin.

Trade thinking continues along the lines of China really having a problem with the price paid for the soybean shipments that it has rejected from Brazil, since they were booked at higher to much-higher prices than current marks.

Most still view the situation in China as a temporary one since the country still has a strong protein-consumption base to feed. China is expected to be back into the marketplace for additional purchases at some point.

Chinese crushers are said to have roughly two to three months' supply of soybeans on hand right now.