Argentina forward sales up on anticipated China bean demand

Argentine farmers sold more soybeans last week than the week previous – despite a slight drop in crush margins as demand from China is expected to rise amid a breakdown in China-US talks.

New crop soybean sales totalled 1.16 million mt for the seven-day period ending 8 May, up by more than 820,000 mt from the preceding week’s total of 1.16 million mt. Both export and domestic crush sales rose on the previous week, with domestic crush purchases up to 861,700 mt from 633,800 mt the previous week and sales to exporters up to 297,200 mt from 189,000 mt.
Higher import taxes for Paraguayan beans, which are needed to improve the protein content of meal, meant crushers bought more Argentinian beans despite lower crush margins.

Soybean futures ended the session with most contracts 3 to 4 cents higher, coming ~12 cents off their highs in the front months. July soy meal was up $1.80/ton, with soybean oil 24 points higher.

The Monthly crush report from NOPA showed that 159.99 mbu of soybeans were crushed by its member in April. That was below most estimates by a million bushels or so and down 0.7% from the same month last year. Soybean oil stocks were slightly higher than the average trade guess at 1.787 billion pounds.

Analysts expect the Export Sales report on Thursday to show 100,000-400,000 MT of old crop beans, with 200,000-600,000 MT for new crop bookings. Soymeal is seen at 125,000-400,000, with Soy oil at 5,000-25,000 MT.