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U.S. Soybean Imports Seen Slowing

Though tight U.S. old-crop stocks still have the attention of the market, favorable new-crop growing weather and the U.S. soybean export infrastructure are expected to slow imports this summer.

An unusual move from China surprised the market in March, when that country's importers canceled 600,000 tons of Brazilian soybean shipments. As a result, an executive of a major company started to sell soybeans planted in Brazil to some U.S.-based players. And at the same time, the Chinese demand for soybeans shrank from 30% to 20% because of epidemic bird flu cases in the country.

The canceled soybean shipments had to find a new home.

In the coming months, U.S. end-users did find it cheaper to purchase the canceled soybean shipments from Brazilian sources.

In April and May, over 200,000 tons of soybeans from the South American country came to U.S. ports.

According to Carlos Cogo, an experienced market analyst from Porto Alegre, Rio Grande do Sul, it is not uncommon that the U.S. imports the soybeans from Brazil, but this year a record would be seen. "Both countries supply one another every year. But now this will be bigger. It will continue until the off-season," says Cogo.

So far in the year, the U.S. is the fourth-largest importer of soybeans from Brazil. In 2013, the North American country imported a total of 324.522 tons from the South American nation being ranked the 13th - beating a record of 2004, reads the figures of Carlos Cogo.

Anne Frick, a senior oilseed analyst at Jefferies Bache in New York, explains that the reason that so many purchases from Brazil happen is because America had too large exports of soybean meal during the first half of the crop season. This has "depleted" U.S. supplies, according to Frick. 

"March 1 soybean stocks were the lowest as a percent of usage in history, and the June stocks usage ratio looks likely to be even more extreme. The market has been expecting imports from Brazil as though they would alleviate a very tight situation. However, logistically, the U.S. is set up to export, not to import soybeans, so that will limit soybean imports. Also, in the past, estimates of imports have tended to overstate them," Anne Frick states.

According to the USDA, America will import 90 bushels including large imports from South America during the first month of the season (September) of 5.58 mil bushels (152,000 tonnes). "To reach the USDA’s import forecast, the U.S. probably has to import five to six cargoes from South America (mainly Brazil) in the June-August period," adds the New York analyst.

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