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China Purchasing U.S. Soybeans as Brazilian Stock Dwindles
USAgNet - 06/18/2020

China's state-owned soybean companies have been purchasing large volumes of US soybeans for the last quarter of 2020 as the Brazilian old crop beans stock declines, making the South American oilseed more expensive than the US crop, sources said.

Chinese state-owned soybean buyers purchased numerous US Gulf soybean cargoes on the evening of June 15, sources said. With limited Brazilian supply for the remainder of the year, Chinese crushers have turned their attention on US soybeans for September to January shipments.

Brazilian soybean old crop is mostly sold out, which makes US soybeans more price competitive, a trader said. According to market participants, Brazil has already marketed over 88% of the estimated 120 million-123 million mt of old crop in the 2019-20 marketing year (February 2020 -- January 2021), up 20 percentage points year on year.

According to S&P Global Platts data, SOYBEX FOB Santos for August loading was assessed at $371.50/mt June 16, while SOYBEX FOB New Orleans was assessed at $351.64/mt.

Brazil has exported 48 million mt of soybeans between January and May, up 37% on the year, with 73% of the soy shipment destined for China, the Brazilian trade department reported in the first week of June.

The USDA is confident that the world's biggest soybean importer will purchase more US beans in the second half of 2020.

China is on track to purchase large volumes of US soybeans in the last quarter of 2020 under the Phase 1 trade deal, a top USDA official said June 16.

Under the US-China trade deal, signed on January 15 after an 18-month long trade spat, Beijing has promised to purchase $200 billion worth of US products over two years, with agricultural imports valued at $80 billion, including raw soybeans.

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