Two Brazilian soybean cargoes initially sold to China have been switched to the United States, according to port and shipping data updated on Tuesday, the first clear evidence that the U.S. is absorbing some of China's excess Brazilian purchases that were at risk of default.
The cargoes, sold by Japan's Marubeni Corp, contained a total of 126,000 metric tons of the oilseed and are scheduled to reach the United States next month.
Importers in China, the world's top soybean buyer, have already defaulted on at least 500,000 metric tons of U.S. and Brazilian soybean cargoes worth around $300 million amid slowing demand and tightening credit. At least one of those cargoes was sold by Marubeni.
Marubeni is more exposed to Chinese defaults than other large grain traders as it and its affiliate Gavilon, which it bought last year, are collectively the largest suppliers of soybeans to China, trade sources say.
"They're the largest seller into China of all the multinationals so if anybody's going to get stuck, they will. It's not a huge surprise that they're trying to cut their losses and find other places to take those beans," says Jack Scoville, vice president of Price Futures Group in Chicago.
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Marubeni's U.S. branch did not immediately reply to a request for comment. The company's Brazil branch has declined to comment on the China situation.
Multinational grain trader Archer Daniels Midland has denied that its cargoes were among the Chinese defaults. Rivals Bunge and Cargill have declined comment.
The U.S. is expected to import a record 1.77 million metric tons of soybeans this year to supplement its tightest stocks in a decade, according to the U.S. Department of Agriculture. Two Brazilian soybean cargoes have already arrived this month and further shipments, including some from Canada, are expected over the next three to four months.
The latest, Panamax vessel Navios Mercury, finished loading with 60,000 metric tons of soybeans at Brazil's Tubarao Port on Sunday and is scheduled to arrive at the Port of Mobile, Alabama, on May 15, Reuters shipping data showed. (Vessel map: link.reuters.com/tuw68v)
"One Panamax vessel of soybean from Tubarao port in the state of Santa Catarina was shifted from China to U.S.," Rich Feltes, vice president of research for brokerage RJ O'Brien, confirmed on Tuesday, citing information from a cash-connected RJO affiliate in Sao Paulo.
Another Panamax, the Akaki, is already en route to the U.S. after being loaded with 66,000 metric tons of soybeans at Brazil's Sao Francisco do Sul port in mid-April. It is scheduled to arrive at the Port of Wilmington, North Carolina, on May 7, the port's website showed.
The cargoes sold by Marubeni were scheduled to load and sail for China as recently as last week, according to vessel lineup data from Brazilian maritime services company Williams.
News of the now U.S.-bound cargoes pressured nearby soybean futures on the Chicago Board of Trade on Tuesday and narrowed the premium of old-crop futures to new-crop by about 10 cents per bushel. That spread had inverted to a historically high $2.71-1/2 per bushel last week amid concerns about tight supplies.
