Oilseeds - Oils

Soybeans: traders deride China's request for virus-free cargoes

June 25, 2020 10:37 AM, Der AUDITOR
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HAMBURG/CHICAGO. Following closer inspections on frozen meat and fruit imports, customs officials in China are now demanding soybean exporters in the US, Brazil and Canada to provide documents guaranteeing that cargoes are free of Covid-19 contamination. The move has mainly sparked confusion in the market.

Controversial move

Brokers have confirmed media reports that China is indeed requesting such certificates. Problem, however, is that clarity is lacking. As S&P Global Platts reports traders in China are waiting for more details and official confirmation. Although China is doing everything in its power to avoid a second wave of infections and has even suspended pork imports from German slaughterhouses impacted by the virus , the move has sparked irritation. Issue is that soybeans are considered anything but an ideal carrier. Traders point out that shipments from the US, Brazil and Canada take months before arriving in China and provide unlikely conditions for the virus to survive. Soybeans are, in addition, not consumed fresh, but are rather processed into animal feed. The WHO also states "that while coronaviruses appear to be stable at low and freezing temperatures for a certain period, food hygiene and good safety practices can prevent their transmission through food". Traders have, nevertheless voiced concerns that food safety controls may escalate on food imports to China.

Soy futures

Soybeans (USD/bu)

869.75

-0.8 %

Soymeal (USD/bu)

287.00

0.1 %

Soy oil (USD/bu)

27.50

-1.9 %

CBOT

China limits shipments from Brazil and Argentina

Soybean futures have recently lost ground in Chicago as US exports to China have nearly stalled. Beijing has, nevertheless, recently purchased 132,000 metric tonnes in the US. Exports also seem to be slowing down in Argentina and in Brazil. ANEC, Brazil's national grain exporters' association, has revised estimates for shipments in June downwards from 13.0 million metric tonnes to 12.6 million metric tonnes. Soybean processing also ranges 1.3% higher than last year in Argentina, an indication that exports are down. Soymeal is trading nominally lower than last week at the main ports in the Netherland and in Germany.

Soymeal LP (44/7) EUR/t, physical market

FOB

7/20

9/20

9/20

10/20

Rotterdam, NL

289.00

289.00

290.00

290.00

Hamburg, DE

283.00

283.00

284.00

284.00

Mainz, DE

297.00

297.00

296.00

296.00

Straubing, DE

319.00

319.00

317.00

319.00

Trade sources



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