Export premiums for U.S. soybeans hit 14-month high due to record harvest

Export premiums for U.S. soybeans hit the highest level in 14 months as traders rush to ship a record crop ahead of the presidential election and fears of renewed trade tensions with China, Reuters reports.

According to the USDA, about 2.5 million tons of soybeans were inspected for export last week, including nearly 1.7 million tons destined for China, a record high for the year. This export flurry is a positive for U.S. farmers, but sellers say this increased demand may be short-lived, leaving the U.S. with a glut of oilseeds at a time when prices are hovering near four-year lows. According to traders and analysts, threats of tariffs have prompted some Chinese importers to avoid shipments from the US since January. Instead, these buyers are ordering Brazilian soybeans and paying 40 cents more than they would have paid in the United States.

Both presidential candidates have threatened to impose tariffs, but the Trump administration has promised to increase tariffs on Chinese products to about 60%.Traders said premiums for immediate delivery of U.S. soybeans are likely to decline in the coming weeks as short-term demand is met and trade war fears limit new purchases from China.

Cash premiums for soybean barges delivered to Gulf of Mexico export terminals by midweek added $1.3 to November futures on the Chicago Mercantile Exchange on Monday, reflecting strong demand for immediate delivery.The same soybeans, if shipped next month, could be bought 27 cents a bushel cheaper, a savings of about $14,000 for a fully loaded 1,500-ton barge.

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Tags: prices, soybean