While the US and China are in a commercial dispute, last week European traders seized the opportunity to buy large quantities of US soybeans on relatively favorable terms.
This was announced on Friday and has subsequently supported the courses of the CBoT soybean futures again. On Friday, the USDA said US exporters sold 458,000 tons of soybeans to unspecified recipients. Now it turns out that these buyers come from Holland and Germany.
The entire crowd goes to the European Union. It is the largest weekly amount in 15 years. US traders are already saying that there is a reorganization of trade flows. Analysts are also assuming that these rather unusual financial statements will last for now.
The US is currently selling less soybeans to China, which are usually handled from the Pacific ports. Instead, shipments through ports in the Gulf of Mexico have skyrocketed for Europe.
Last week, US soybean prices plunged by as much as 5% after China imposed punitive tariffs on US soybean deliveries. The US is the largest supplier of soybeans to China.China buys about 2/3 of soybeans available on the world market.
In fact, US soybeans are becoming too expensive for China at this time of the year and Brazil is taking over the export business. With Chinese importers now betting on Brazilian soybeans, Brazil's soybean premiums rose last week. For immediate deliveries, spot prices in South America are now 200 cents per bushel above the CBoT May 18 listing. By comparison, US soybeans from Gulf cost 90 cents more than the CBoT listing.
Nevertheless, Brazil will now become the preferred supplier for China and the spread between US and Brazilian beans is likely to remain high as long as the trade dispute is not resolved. As a result, on Friday, some buyers (with the exception of the Chinese) now prefer to buy US beans. That's a pretty normal arbitrage deal, US exporters comment on the development.
Text: HANSA Derivatives Trading GmbH /
