HAMBURG, March 19 (Reuters) -
China’s soybean stocks are at low levels despite its recent decision to cancel
soybean import orders and the country’s March imports may be below its needs,
Hamburg-based oilseeds analysts Oil World said on Tuesday.
“Chinese stocks of imported soybeans
declined pronouncedly during the past three to five months and are continuing
at undesirably low levels also in March and April owing to the ongoing shipment
delays in South America, at least for the time being,” Oil World said.
“Combined U.S. and South American
soybean shipments in March will again be below the Chinese requirements. In
other words, at the moment Chinese importers cannot get what they purchased.”
Soybean prices have been falling in
the last week, partly on slower demand for U.S. supplies as the huge new
Brazilian crop starts to enter the global market.
But limited transport infrastructure
combined with the threat of more strikes at ports have so far limited Brazil's
ability to export a crop that is some 25 percent bigger than last year.
Expecting shipment delays, China,
the world's top soybean consumer, cancelled at least two cargoes of Brazilian
soybeans in February and likely reneged on more orders this month, traders
said.
But Chinese buyers had little choice
than to accept postponement of soybean shipments from Brazil in the face of
transport problems, Oil World said.
“The Chinese know very well how to
influence the market,” Oil World said. “They made announcements about
cancellations of soybean purchases as well as of deteriorating profitability in
the domestic pork industry, which may slow down soybean crushings and thus
soybean import requirements.”
This contributed to a change of
sentiment in soybean futures market, helping to create weakness, Oil World
said.
“The Chinese situation would be more
comfortable if the reduced Chinese soybean stocks could be replenished
sufficiently until May, providing a hedge against any weather problems and crop
risks in the United States,” Oil World said.
Brazilian exports of soybeans are
increasing seasonally but latest indications suggest that in March also soybean
exports from Brazil will again fall short of consumer requirements, it said.
“There is ongoing competition
between exports of soybeans and corn,” it said.
In neighbouring Argentina, the soybean
crop still faces weather risks, it said.
“There is the risk that this year’s
Argentine crop will turn out below our latest estimate of 49.0 million tonnes,”
it said.
Argentina harvested 39.9 million tonnes of
soybeans in early 2012. The Argentine government currently forecasts a 2013
crop of 51 million to 52 million tonnes.
