May 6, 2013
Argentina to export soy to China, not US
Despite rumours of US-bound shipments that have hurt benchmark Chicago prices, ships are lined up in Argentine ports to export 1.4 million tonnes of soy, mostly to China and none to the US.
US soy futures tumbled on Wednesday (May 1) on widespread talk South American soy may be imported into the US, traditionally the world's top producer, where supplies have thinned to the lowest in nine years. Argentina is the world's No. three soy provider after Brazil and the US.
"In April and early May there have been no vessels nominated to go from Argentina to the US with soy. The rumour came from the fact that beans are cheap in South America and the very tight situation in the US," a Buenos Aires-based source at a major export company said on Thursday (May 2).
"The total nominated for export so far in May from Argentina is 1.4 million tonnes," the source added. To be nominated means an export deal has been booked, the ship has been named and it is waiting to receive its load.
"China accounts for one million tonnes of the total with the rest going to Italy, the Middle East and Southeast Asia," said the source, who has direct knowledge of the situation but asked not to be named. A source at a brokerage with operations in Argentina confirmed the information.
A record-large South American harvest has dragged down prices in Brazil and Argentina to levels that could trigger purchases by some US importers. Chicago traders were sceptical but conceded that "anything is possible" given how tight US soy stocks are.
South American producers have taken a bigger share of the grains export market from the US over recent years, a trend that deepened in 2012 when the worst US drought in decades hit soy and corn yields in the country's farm belt.
The difference between cash soy prices and futures prices has expanded to the highest ever Northern Hemisphere springtime levels across the US as supplies of the crop harvested last autumn are seen dwindling to the lowest in nine-years by the end of the US summer.
With the next US harvest not expected to start for months, Argentine growers have already collected 66% of this year's crop, which is expected by the Buenos Aires Grains Exchange to hit 48.5 million tonnes. The country's government forecasts a soy take of 51.3 million tonnes this season. The fresh Argentine supply may keep rumours of US bound soy cargos alive in the grains markets in the weeks ahead.
Some veteran US oilseeds analysts said it was more plausible that soymeal, rather than beans, would be imported. "I think soymeal is more likely. It could be brought into East Coast feeders," a US-based oilseeds source said.
Argentina is the world's top supplier of soymeal animal feed and soyoil, used in the growing international biofuels sector.