Prices could favor US soybeans despite low interest in China’s auctions: sources

The current price advantage of US-origin soybeans has the potential to create seasonal opportunities for more Chinese purchases of US cargoes, some sources said, despite subdued interest in China's auctions of imported soybeans.

China's Sinograin sold 209,904 metric tons, or 40.5% of the 517,858 mt offered, at a state reserve auction Oct. 13, four China-based grain traders said.

According to the sources, the auction offered soybeans from the 2023, 2024, and 2025 crop years, with an average transaction price of 4,298.4 yuan/mt ($642/mt).

The reported auction trades were equivalent to trade values of Brazil's October shipments at 274 cents/bu over November (X), basis CFR China, one of the traders said.

On Oct. 14, China's National Grain Trade Center announced another Sinograin auction of 504,000 mt of imported soybeans from state reserves, which is expected to take place on Oct. 20.

A China-based source said interest in such auctions has been subdued, despite auction values being more competitive than those of Brazilian soybeans.

"It seems like Chinese buyers are not short of soybeans now, and supplies appear to be sufficient through January 2027," the trader said.

Weak buying interest could also be related to poor Chinese crush margins, say sources.

"Crush margins are not good, and auction results have been largely similar in the recent weeks," the trader said, adding that current margins for nearby shipments are calculated at minus $25/mt.

While the outright price of soybeans offered in the auctions appeared competitive, additional delivery and inland logistics costs also weighed on buyers' interests.

"On paper, the soybeans may look cheap, but buyers still need to account for delivery, inland transportation, and other logistics costs," said a Chinese trader. "For some warehouse locations, the transportation costs were simply too high to justify the purchase."

On Oct. 15, Platts-assessed gross crush margins stood at minus $19.52/mt, down $4.25/mt day over day.

US sources expressed mixed views on whether China's auctions create opportunities for US soybeans.

"[China's] auctions have not been all that popular," a trader in the CIF New Orleans market said, "It's worth noting that their last tender failed too."

"If they [auctions] are popular, they would definitely generate opportunities," a trader in the FOB Gulf market said.

Meanwhile, some participants reported renewed buying interest in nearby US soybeans, while demand for Brazilian cargoes remained limited amid higher prices.

Platts, part of S&P Global Energy, assessed SOYBEX FOB New Orleans for November shipment at $505.23/mt on Oct. 15, while the SOYBEX FOB Santos soybean contract for November loading was at $517.38/mt. CFR China soybean month-one November shipment was at $582.30/mt.

On Oct. 14, the US Department of Agriculture confirmed private sales for 470,000 mt of US soybeans for delivery to China during the 2026-27 marketing year, followed by 330,000 mt on Oct. 15.

According to S&P Global Energy CERA, as of Oct. 15, the USDA had confirmed the sale of 11.942 mt of soybeans for delivery to China during the 2026-27 marketing year.

Sources in the Brazilian market believe that the opportunity for US soybeans is seasonal and doesn't represent a significant impact on Brazilian soybeans in the long run.

"What we are seeing is a seasonal and state-driven rebalancing rather than a structural displacement of Brazil," a Brazilian trader said. "While cheaper US cargoes could continue to attract discretionary demand for late-2026 shipment and possibly January, Brazil's position remains supported by a large share of Chinese new-crop coverage already on the books."