China pays high prices to buy 81% of Brazil’s October soybeans

The Asian agriculture giant bought 2.7 million tonnes of Brazilian soybeans last month

By Eduardo Tinti, price reporter for Fastmarkets AgriCensus

China bought 2.7 million tonnes of Brazilian soybeans in October, 81% of the South American country’s monthly exports and enough buying to contribute to lifting FOB prices to a multi-year high, official customs data showed.

Chinese purchases out of Brazil jumped 35% on the year as the main global soybean importer turned to South America to cover its spot demand amid logistic disruptions and delays in the US.

With the uptick in Chinese demand, Brazilian October exports jumped 36% on the year to 3.3 million tonnes considering all destination markets.

Other relevant importers in October were Spain, Vietnam, Thailand, Iran and Norway, each of which secured between 2% and 6% of Brazil’s exported volumes.

Brazilian beans exported in October were mainly originated from Rio Grande do Sul, which accounted for 40% of total volumes shipped.

The heated cash market came amid robust Chinese spot demand and boosted average FOB values to $522.54 per tonne, the highest level since January 2014 in nominal terms.

The historically high prices were underpinned by elevated basis premiums in the Brazilian cash market, especially in the end of September and beginning of October.

Moving into corn, Brazil’s October exports remained largely subdued on the year at 1.8 million tonnes due to the ongoing impact of the massive second crop safrinha production loss.

The crop loss affected primarily southern states, a fact that was also depicted by the loading location of October’s exports - with most of the volume mainly originating from Mato Grosso (57%), São Paulo (14%) and northern states (17%).

Meanwhile, Brazil imported 503,000 tonnes of corn in October, 51% from Argentina and 49% from Paraguay.

Residual volumes were also bought from the US and from Chile.

About 94% of total volumes imported in the month headed to southern states, another reflection of the major crop loss in this region.

From January to October, Brazil imported 2.1 million tonnes of corn, the highest volume for this period of the year in the whole custom office’s time series, starting in 1997.

Looking ahead, the pace of corn exports is expected to pick up somewhat while imported volumes edge lower as the domestic market is less tight than previously anticipated.

That has, in turn, contributed to dampen domestic prices towards export parity levels.
This article, by Eduardo Tinti, was originally published to on Monday November 8.

Stay up to date with the critical forces influencing price and market movements across the agriculture market. We look forward to regularly sharing more insights, trends and trade news with you on the Fastmarkets oilseeds and grains insights hub.

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