China back for February US soybeans as Brazil supplies delayed

China was back in the market for February cargoes out of the US this week, with market sources suggesting likely delays in shipments from Brazil may have prompted the world’s biggest soybean buyer to make additional purchases.

Agricensus traced three to four sales into China from the US Gulf this week, with price levels heard at around 215 c/bu over the March CME soybean futures contract including cost and freight (CFR) to China.

USDA data for February shows 1.13 million mt of soybeans were inspected for export from US ports, up 53% on same period of 2022 and twice the average of the last four years.

“We think they could be for replacing late Brazilian shipments. In this case, March would be already 100% covered,” the market source said.

“I do think there are concerns with the size of the line-ups in Brazil and that could push sales to the US,” another said.

Just 944.385 mt of soybeans were shipped from Brazil in January, 1.3 million mt lower than in January 2022 and well below the 1.3 million mt estimated to be shipped earlier.

According to Daniele Siqueira from Brazilian consultancy AgRural, that’s a natural path in such circumstances and volumes are not that big.

“These are deals cover occasional needs since the price in the US is much less competitive than in Brazil,” she told Agricensus.

Heavy rains at the start of the year hampered field work in many key producing regions of Brazil, meaning the local soybean harvest got off to a very slow start.

As the harvest is late, Siqueira added, the shipments from Brazil have already been lower than they could be in January, and in February the country is likely to not hit records as happened in February 2022, when the country exported 6.2 million mt.  

That said, Brazil will have an accumulation of shipments in March. “This perspective is behind the decision of importers to give preference to shipments after that, to avoid possible logistical difficulties,” she added.

Brazil’s 2022/23 soybean harvest was estimated by food agency Conab to have reached 8.9% of the 43.4 million hectares (ha) area planted in the week ended on February 4, well behind last year’s pace, when 16.8% of the area had been harvested at the same point.

According to Siqueira, Brazil has a strong program of shipments to China, with most volumes negotiated before the Lunar New Year.

“There have been deals after their holiday, many with shipments for April, but nothing out of the ordinary. We do not see, for now, China returning to its traditional strong appetite,” she said.

Meanwhile, the country has continued to export corn later in the season than it normally would, with China now one of the main destinations.

Just a few months after the shipments of the first cargoes were made in November and December, China became the 9th most important market, with 1.69 million mt purchased, according to the grain exporters’ association Anec.

"This delay in the harvest was bad on the one hand, but on the other hand it helped finalize corn shipments," a market source in Brazil commented.

It is also possible that the relatively slow export rate for US corn is also helping free up logistics for soybeans in a reverse dynamic to the Brazil effect.

US corn exports have amounted to about 13 million mt so far this marketing year, down 37% from 20.71 million mt recorded at the same point of last year.