China washes out soybean, vegoil cargoes amid poor margins

China-based soybean crushers and vegetable oil processors have resold at least 10 cargoes of Brazilian soybeans, as well as palm oil from Southeast Asia in the past two weeks as crush margins in China, fell sharply, according to several trade sources.

Four-to-five cargoes of Brazilian soybeans for shipment between February and May this year were washed out in recent days, while three cargoes of palm oil, and one cargo of soyoil were also resold on Tuesday, two trade sources told Agricensus on Wednesday.

“Margins for those cargoes were not even as good as just selling on the board... The market is pretty bearish on vegetable oils,” said one China-based analyst.

A slow harvest and stagnant loading pace in Brazil were blamed for the soybean wash-outs.

“Brazil loading is very slow, plus recent crush margins were not good,” a China-based soybean trading manager said.

Soybean crush margins in China lost more than $20/mt across the curve in the past week with the gross margin for May shipments of Brazilian beans at around negative $3/mt, with US beans for the same window at minus $30/mt.

The wash-outs came against the backdrop of weak soyoil futures in China with May futures on Dalian Commodity Exchange down to a one-week low of CNY7,538/mt ($1,169/mt) on Wednesday, down 2.2% on the day.

For more information on crush margins, please see our Soybean Crush Dashboard.