Stronger renminbi aids Chinese soybean buying: CNGOIC

The strength of China’s renminbi versus the US dollar has shielded Chinese buyers from a rise in Board prices and enabled them to contract cargoes, China National Grains and Oil Information said Thursday.

“In China, the appreciation of the renminbi has offset the increase in the soybean price and given importers more buying power,” the centre said in an emailed market update on Thursday.

On Thursday, the CNGOIC said the import price into China was $423/mt as of Wednesday. That compares with Agricensus’ assessment on Wednesday of $424/mt.

The dollar has weakened against key currencies such as the renminbi and Brazil’s real by 2.7% over the past month after US Treasury Secretary Steven Mnuchin said a weak dollar was “good” for the US economy.

Such a move has more than offset a 1.8% rise in soybean futures and should have helped Chinese purchases of US beans over the past month.

But despite US beans falling in price versus Brazil’s beans, Chinese purchases over the past week have focussed on snapping up higher protein content from South America.

Two market sources said China has bought at least five cargoes out of Brazil over the past couple of days for March loading, with one source claiming prices of around 150 cents over March futures.

A third source said up to 10 cargoes have traded in the past two days, as the real firmed to 3.18 and futures touched on $10/bu.

That compared with export sales of just 359,000 mt from the US, well short of the 600,000mt to 1.2 million mt the trade was expecting.