March 3, 2022
China purchases US soybeans on good profits
China has purchased US soybeans as American cargoes emerged competitive against shipments from Brazil, despite it currently being the peak period for soy exports from South America, Reuters reported.
An Asia-based trader with knowledge of the deal said China has booked a minimum of five cargos or around 300,000 tonnes of soybeans from the US for April-May shipment.
The US Agriculture Department (USDA) confirmed that private exporters had reported the sale of 198,000 tonnes of soybeans to China and another 198,000 tonnes of soybeans to unknown destinations for delivery in the 2021/22 marketing year that ends August 31, 2022.
China is the biggest importer of soy in the world.
The trader said China also booked a few US new crop soybeans that will be available from September. The trader has declined to be identified as he was not allowed to speak to media.
USDA reported sales of of 68,000 tonnes of soybeans to China and 66,000 tonnes of soybeans to unknown destinations for 2022/23.
The trader said the agreement to purchase US soybeans were cheaper than Brazilian soybeans, adding that physical crush margins were "sexy".
China-based Mysteel consultancy said physical crush margins for US Gulf beans for delivery in April-May were around CNY 500 (~US$79.19; CNY 1 = US$0.16) per tonne.
Another trader based in northern China said margins are high and those who have purchased the beans would make a lot of money.
This trader, who also declined to be identified as he was not allowed to speak to media, said China has been buying US soybeans since after the Lunar New Year holiday are prices are about the same as Brazilian soybeans but logistics for US cargoes were faster.
Soybean meal prices in China rose to record prices in February because of tightening supplies and as a drought slashed crop size estimates and delayed exports in Brazil, the biggest exporter of the oilseed globally.
Soymeal and soybean oil prices in China also increased because of Russia's invasion into Ukraine, as both Russia and Ukraine are key grain and edible oil exporters.