Chinese crushers forced to seek PNW as Brazil port jam lingers

Major soybean crushers in China have been forced to turn to the US Pacific Northwest to check prices for prompt front-month shipments, as soybean loadings at Brazilian ports face severe delays after heavy rains, leaving a potential supply gap.

One large private crusher was said to have sought prices for shipments of PNW soybeans in the second half of March as they look to secure supply capable of reaching China by April, amid delays to Brazil’s February shipments.

“It was said that the reason was shipments of Brazilian soybeans were delayed and they want to replenish,” one soybean trading manager from a major trading house said.

However, no trades were reported overnight.

“It seemed like no cargoes can be found for [full] March. It might be April and second-half March,” said one soybean trader from an international crusher.

Major exporting ports in Brazil, including Santos and Paranagua, have experienced congestion as loading paces slowed significantly due to heavy rain.

Line up data from ship agents Williams, released Tuesday, suggests that 6.2 million mt of soybeans are expected to be loaded out of Brazil's ports by the end of March.

Of that, some 2.9 million mt is due to load on vessels that arrived at the port in February, with two vessels – the Graecia Nautica and the Ever Best – arriving in January and neither currently expected to sail until the second half of March.

“I heard that some January shipments have not even made it out,” one broker said regarding the situation.

Despite the sporadic buying interest in the US, Chinese crushers remained active in Brazil on Tuesday, booking at least 10 cargoes for shipments between April and July this year as well as shipments for April 2021.

Prices for US beans out of the PNW were still uncompetitive against Brazilian ones after the USDA expected Brazil’s harvest could hit a record of 126 million mt this year, placing its prices even cheaper than the US.

China has pledged to purchase a total of $40 billion worth of US agricultural product this year, of which a large portion is expected to come from the soybean sector.

The Chinese government has also approved tariff exemptions of US soybeans for several Chinese crushers last week, but no significant demand for US beans has stemmed from the action as Brazil remains more competitive.