China has booked at least 10 — and possibly up to 15 — Panamax cargoes of Argentine soybeans for November arrival after Buenos Aires temporarily suspended its grain export tax, a move that immediately undercut U.S. competitiveness during America’s prime export window.
Traders told Reuters in an exclusive report that the deals were done within hours of the policy shift, with cost-and-freight prices quoted at a premium of $2.15 to $2.30 per bushel to the CBOT November soybean contract. The news helped push Chicago futures to a six-week low and added pressure to U.S. growers already battling weak prices and absent Chinese demand. That means billions of dollars worth of missed-out sales.
For U.S. farmers, the timing stings. “Every time China turns to South America instead of the U.S., soybean farmers and our farm families here at home lose out,” Caleb Ragland, a Kentucky producer and American Soybean Association president, said to Reuters.
Market analysts say the message is plain: “China is trying to avoid the U.S. during our export window,” said Ted Seifried of Zaner Ag Hedge.
Argentina typically levies a 26 percent tax on soybean exports, but the government suspended duties through October, or until declared exports reach $7 billion, instantly improving Argentine basis versus U.S. Gulf and Pacific Northwest offers. The shift is already showing up downstream: China’s Dalian soymeal and soyoil futures fell about 3.5 percent on expectations of cheaper raw supplies and favorable crush margins. Argentine crushers, however, warned that surging whole-bean exports could tighten domestic supply.
“The temporary tax cut encourages China to take Argentina’s soy,” said Gustavo Idígoras, who leads the country’s soybean crushing chamber.
China has not purchased U.S. new-crop soy so far this season, according to traders, after heavy buying earlier in the year lifted Chinese imports to record monthly highs and swelled inventories as a hedge against fourth-quarter disruptions. With November cargoes now lining up from South America, the next catalysts to watch are whether Argentina’s $7 billion export cap is reached before month-end and whether any progress in U.S.-China talks revives U.S. sales later in the year.
