Chinese soybean import bill likely to rise 4% on futures, freight, cash bids

The price of US soybeans delivered into China are expected to rise 4% to near $430/mt in the early part of next year as a rise in soybean futures prices, cash differential bids and freight rates could take its toll.

Census assessed soy bean delivered into China this year at $415/mt on Wednesday, although calculations show that this could increase substantially as Brazil disappears from the market due to a dearth of supply.

Differential cash bids for soybeans at US Gulf ports have firmed 25% since Monday, outstripping gains made in the futures as exporters seek to fill roaring Chinese demand.

The mid-point for differential bids for bushels delivered on barge at Louisiana ports for the next 30 days have risen to 20 cents over November futures from 16 cents on Monday, according to USDA data.

With November futures valued at $9.915/mt at time of writing that equates to $372/mt, compared to Monday’s equivalent price of $369/mt.

While at the same time freight on a Panamax-sized vessel to northeast Asia was estimated by the US Wheat Association at $43/mt, up $4/mt over the past two weeks.

Taking into account an estimated $12/mt charge loading the beans on to the vessel, soybeans could be delivered into China at $427/mt.

That is a chunky 4% up on the $411/mt average price China paid for imported beans in October, according to China customs data published Wednesday.

The rise is in part due to the disappearance of Brazil from the soy market.

Sources in Brazil told Census that beans for loading this year were at “a minimum of 60 cents over January futures,” or $390/mt FOB Paranagua, leaving US beans, even at a delivered price of $427/mt, more competitive.

The majority of US exports of soybeans head to China, where demand this year has risen 15% year on year to 77 million mt from January through October.

However, a recent depreciation of the real and a bumper harvest last year has seen Brazil compete on shipping schedules for October and November.

USDA released Thursday showed that US exports of soybeans fell to 1.16 million mt for the week ending November 2, down 39% from the previous week and down 34% over the previous four week average.