China's weak soybean demand dims prospects for US cargoes after tariff snub

Business Recorder reported that China's soybean purchases are likely to slow in the months ahead, given subdued feed demand and losses in crushing margins. US cargoes have little room in that outlook, as soybeans were left out of the farm goods list that Beijing plans to lower tariffs on following last week's Washington summit.

Private Chinese oilseed processors have largely secured supplies through early February from Brazil, Argentina and state reserves. State-run firms have bought about 13.7 million metric tons of US beans, now being harvested, following a May trade deal, but private crushers have taken only South American cargoes. US soybeans still carry an extra 10% tariff, which makes them uneconomical for commercial buyers.

Crushing margins are negative for both US cargoes and Brazilian beans, while inventories at 111 crushing plants reached 7.96 million tons, the highest reading in over 15 years according to consultancy Mysteel. Sinograin's latest imported bean auction saw only 37.3% of the 514,000 tons offered change hands. Chicago soybean futures have fallen 1.5% in the current week as the American harvest approaches its peak.