NASHVILLE, Tenn. (RFD NEWS) — Cargill Brazil is pausing all soybean exports to China after the Chinese government requested stricter import inspection protocols that began last week.
While officials say the finer details are still being negotiated, market analyst Brian Hoops of Midwest Market Solutions believes the move is likely fueling recent action in U.S. soybean markets.
“That was kind of the headline reason we were higher yesterday, and we pushed to new highs. We went above Sunday night’s highs for a period of time, but we didn’t close there,” Hoops explains. “There was a lot of concern that maybe Cargill out of Brazil was going to cease exporting beans to China about some concerns about the quality of beans. The U.S. always has high-quality soybeans here, and we rallied, anticipating we might get some of that business. The way it sounds, they’re going to get things worked out pretty quickly between Brazil and China, and they’ll resume exporting those soybeans once again.”
In the meantime, Cargill has stopped buying soybeans from local farmers in Brazil. Officials call China’s request unusual and say it could make it harder for traders to comply.
Corn, Soybeans Lead Weekly U.S. Export Sales Activity
Corn and soybeans again led U.S. export activity for the week ending March 5, with strong grain movement and mixed livestock trade highlighting global demand trends.
Corn net sales reached about 60.3 million bushels, down week-to-week but still strong, led by Japan, Mexico, South Korea, and Colombia. Weekly corn exports totaled roughly 67.4 million bushels, with Mexico and Colombia among the top destinations. Soybean net sales came in near 16.8 million bushels, up from the prior week, while exports totaled about 36.6 million bushels — led by China, Egypt, Indonesia, and Mexico.
Wheat net sales totaled roughly 16.7 million bushels, sharply higher week to week, with Mexico, China, Japan, and the Philippines leading purchases. Weekly wheat exports reached about 15.9 million bushels. Sorghum sales totaled about 3.9 million bushels, driven largely by China and Spain, while exports reached roughly 8.3 million bushels.
In livestock, beef net sales hit a marketing-year high at 25,400 metric tons, led by South Korea and Japan, while pork sales slipped to a marketing-year low, though exports remained steady.
Numbers in the World Agricultural Supply and Demand Estimate (WASDE) for March, released earlier this week, brought few surprises for the domestic market; the USDA report included some notable adjustments to international production. Market analyst Dr. Todd Hubbs says these global changes are worth monitoring in the months ahead.
“We saw some small changes around the edge in international markets, you know, reflecting slightly smaller crop in Argentina for some crops,” Hubbs says. “They lowered Black Seaweed exports out of Ukraine and Russia slightly because their pace has been off, but raised crush on soybeans slightly and lowered biofuel use for soybean oil on pace.”
Hubbs says he is also monitoring global competition, particularly in Brazil. He says while their prices are often lower than those in the U.S., it is difficult to bridge that gap.
“They have huge operations. They’re spreading their cost over millions. It’s a lot of acres,” Hubbs explains. “They have a different cost structure on their farms, and they’re very, very competitive on the global market, particularly the soybeans. You know, they are even competitive in corn when they have a safrina crop, that crop is on and off because the timing of the rains in April and May really matters for that one.
However, Hubbs noted a slight increase in the domestic soybean crush, which was offset by lower projections for soybean oil biofuel use.
“But [Brazil], they’re just very, very competitive,” he said. “They’re the lowest-cost producers, and they’ve enacted economies of scale on their farms, and it is just tough to compete.”
