Chinese importers are taking advantage of a harvest-time slide in US soyabean prices to ramp up buying from the world's No. 2 exporter, filling fourth-quarter import needs as supplies from rival exporter Brazil have thinned, traders and analysts said. US exporters booked 1.212 million tonnes in soyabean sales to top importer China and unknown destinations, the US Department of Agriculture said on Wednesday, among the top 10 daily soyabean sales announcements ever and the eighth daily sales announcement in nine trading days.
The "unknown destination" is widely believed to be China, traders and analysts said. The bulk of sales are expected to be shipped in October and November, with shipments loaded at both Gulf Coast and Pacific Northwest terminals, they said. Benchmark Chicago Board of Trade soyabean futures gained about 5 cents a bushel after the announcement, although traders noted that more large purchases are needed to bring sales more in line with full-season export forecasts.
US farmers and grain traders are banking on robust global soyabean demand to help absorb surplus supplies following record-large crops in the United States and Brazil, which collectively produce two-thirds of world supplies. "This is a welcome surprise. It's the time of year when we should be ramping up sales and we could use every bushel of business to catch up," said a US soyabean trader who asked not to be named because he is not authorized to speak to media.
US soyabean export sales for the 2017/18 marketing season were about 25 percent behind a year ago as of September 7, according to USDA data. The agency is forecasting a 3.7 percent increase in US soyabean exports this season. Spot US Gulf shipments are offered at around $377 per tonne, free-on-board, about $10 below prices at Brazil's Paranagua port, Reuters data showed. Brazilian offers are unquoted beyond October.
Competitively-priced US shipments offered Chinese importers a buying opportunity following a pickup in cash soyameal purchases by the country's livestock producers this week, said Dan Basse, president of consultancy AgResource Co. "The meal market is catching a bid in China and that's translating into them covering more beans. A lot of the livestock people in China have been relatively short bought on meal, hoping for a big US harvest," he said. China's heightened pace of buying comes ahead of the Golden Week national holiday in early October, when markets will be closed.
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