China snaps up at least 1 million mt of soybeans from Brazil

Large-size crushers in China kicked off a buying spree this week soon after the end of Chinese New Year holiday and snapped up at least 1 million mt of soybeans from Brazil, four market sources told Agricensus.

Both state-owned giants Cofco and Sinograin along with private major Wilmar were heard booking at least 15 cargoes – worth 1 million mt of soybeans – from Brazil so far this week as they look to cover demand on decent crush margins.

China's total purchase this week could have already hit 1.3 million mt, according one trade source in the market.

Ten cargoes were heard traded on Tuesday alone as gross margins in China improved sharply thanks to a rebound of domestic soymeal and soyoil futures and weak cash premiums due to low freight cost.

China has covered around 6.5 million mt of February shipment, and more than 6 million mt for March shipments, while coverage for both April and May shipments were at least 4 million mt each.

China ramped up buying of Brazilian beans in spite of a recently agreed trade deal with the US by which China pledged to more purchases of US agricultural goods such as soybeans.

However, prices for US soybeans are still uncompetitive when compared with Brazilian ones as new harvest for the latter are underway.