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US grains exporters said on Tuesday that China has cancelled three cargoes of soyaoil purchased from Argentina, in a possible signal to the red-hot market that soya prices need to correct lower from multiyear highs.
There was also talk that China, the world's top soyabean buyer, scrapped purchase of a cargo of US soyabeans. Traders also said plans were afoot to import soyaoil into the United States, the world's top soyabean exporter, from South America.
The talk, which could not be independently confirmed, fed a sharp late tumble in CBOT soya complex futures on Tuesday.
March soyabeans closed down 31-1/4 cents a bushel to $9.31 after rising to a 15-1/2 year high at $9.79-1/2 in the march soyaoil closed 1.22 cents lower at 33.35 cents a pound after setting a new 19-year high at 35.03 cents.
March soyameal closed down $3.90 at $280.00 per ton after a 6-1/2 year high.
Dwindling US soyabean supplies and weather woes in Brazil, which have delayed the harvest in the second-largest soya exporting country, have been driving the torrid CBOT rallies.
But exporters said high prices had begun to cool demand for US soyabeans, noting that cash basis values in Brazil have been falling despite forecasts for production this year being steadily scaled back due to weather problems.
"The world soyabean market is not functioning anymore because prices are too high," one US exporter said. "China has cancelled three cargoes of oil, of 20,000 tonnes each," the exporter said.
"It's definitely a message, it's a key reversal in prices," he added.
Chinese crushers have been hit with poor profit margins as meal demand declines as China battles a deadly bird flu that has killed or led to the culling of millions of chickens.
Another US exporter said there was talk that two US companies were planning to import soyaoil from South America.
He said the talk was that one company was planning to import two cargoes of 30,000 tonnes each for a food company, and that a second firm was looking to import 150,000 tonnes.
The exporter said US soyaoil prices were now quoted at around $777 per tonne FOB, which excludes shipping costs.
That compared with around $650 per tonne for Argentine supplies. "On paper, it works," the exporter said, referring to imports being economically feasible.
But he said it could take up to two months before the soyaoil is shipped to the US Gulf, processed at a Midwest plant, and supplied to the end-user.
"You add the time involved, it might not seem all that workable after all," the exporter added. There was also talk that soyaoil may be imported from Bolivia due to absence of a US import duty.

Copyright Reuters, 2004

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