April 24, 2014


Marubeni's China-bound Brazilian soybeans sold to US



Two Brazilian soybean cargoes containing a total of 126,000 tonnes initially sold by Japan's Marubeni Corp to China have been switched to the United States, according to port and shipping data updated on April 22.


The cargoes are scheduled to reach the United States next month, as the United States starts to absorb some of China's excess Brazilian purchases that were at risk of default.


Importers in China, the world's top soybean buyer, have already defaulted on at least 500,000 tonnes of US and Brazilian soybean cargoes worth around US$300 million amid slowing demand and tightening credit. At least one of those cargoes was sold by Marubeni.


Marubeni is more exposed to Chinese defaults than other large grain traders as it and its affiliate Gavilon, which it bought last year, are collectively the largest suppliers of soybeans to China, trade sources say.


The United States is expected to import a record 1.77 million tonnes of soybeans this year to supplement its tightest stocks in a decade, according to the US Department of Agriculture. Two Brazilian soybean cargoes have already arrived this month and further shipments, including some from Canada, are expected over the next three to four months.


News of the now U.S.-bound cargoes pressured nearby soybean futures on the Chicago Board of Trade on April 22 and narrowed the premium of old-crop futures to new-crop by about 10 cents per bushel. That spread had inverted to a historically high US$2.71-1/2 per bushel last week amid concerns about tight supplies.