Chinese soybean crushers washed out several cargoes of US soybeans last week as crush margins in China tightened amid CBOT soybean futures hitting a four-year high, market sources have told Agricensus.
At least two crushers in China were heard to have washed out front-month shipments of US cargoes as margins worsened due to the recent rally of soybean futures, according to three different trade sources who have knowledge of the matter.
“Because margins are too bad… [They] washed out and wait,” one well-placed source said, referring to a process whereby agreed physical trades are settled financially, rather than by taking ownership of the physical cargo.
Another two sources confirmed the action but declined to disclose further details.
Although the exact shipment could not be confirmed, market sources suspected that December and January shipments were the most likely.
Chinese crushers have almost fully covered their demand for December shipments and only have less than half a million mt left to cover for January, according to trade data gathered by Agricensus.
CBOT soybean futures last week surged to the highest level since June 2016 after the USDA cut estimates for 2020 ending stocks significantly.
At the same time, dry weather in Brazil has raised doubts over whether the country will be able to hit an expected record harvest of around 140 million mt this year.
