Chinese soyabean importers have shifted their buying interest temporarily away from the US soya crop and bought about 13 South American soya cargoes over recent days, traders said on Tuesday. Chinese crushers still need to buy US soya crop for December and January shipments, but rising Chicago Board of Trade prices have prompted some to hold off.
US soyabean futures closed sharply higher on Monday on a slowdown in the US harvest on worries of bad weather. "Buyers have bought 12 or 13 South American cargoes, many of which are for May shipment. Crushing margins have improved a lot," said a trader with an international trading house. At 55,000-60,000 tonnes per cargo, that would work out at 660,000-780,000 tonnes in total.
Another trader said big crushers had already booked more than half of the new South American cargoes they would need, having bought more than 5 million tonnes already, all for shipment after April. "For US soyabeans, crushers have not finished their purchases for December and January shipment. They are still buying but more willing to wait because of high premiums," said the second trader.
Low soya imports in September and also expected for this month have driven up domestic soyameal and soyaoil prices as business resumed after the 10-day National Day holiday in the first week of October. In addition, many crushers shut down over the holiday, leading to tight supply of the feed ingredient, particularly in coastal areas in the north, traders said. "We estimated about 80 or 90 percent of crushing facilities were shut down during the holiday. Some could remain closed because of a lack of soyabeans due to low imports in October," said Gao Chulai, an analyst with a feed industry web site (www.chinafeedonline.com).
Traders said October imports were expected to be even lower, with one estimating the figure at only 1.5 million tonnes. September imports were at about 2.5 million tonnes. That compares to around 3.5 million tonnes that crushers need to run normal operations for a month. "Still, the tightness in supply could ease at the end of the month when large cheap US soyabean cargoes arrive on the market," said the first trader. China's soya imports will pick up from November and December, with each month at about 4 million tonnes, traders said. Despite low imports in October, traders said crushers in the north may not be willing to take soyabeans from state reserves as Beijing's prices were too high for them to make a profit.