Soybean Cash Premiums Fall as U.S. Shipments May Slow to China

April 15 (Bloomberg) -- Premiums for soybeans at export terminals near New Orleans fell relative to Chicago Board of Trade futures on speculation that China will slow imports of supplies from the U.S., the world’s largest grower.

Bids for barge delivery of soybeans to New Orleans this month were 46 cents to 50 cents a bushel above May futures on the CBOT, compared with 50 cents to 52 cents yesterday, U.S. Department of Agriculture data show. Cash bids for delivery next month fell 7.1 percent to an average of 52 cents a bushel over May futures from a 56-cent premium yesterday, the USDA said.

Shipments to China, the world’s largest soybean consumer, may face delays after a crop-damaging virus was identified in 10 cargoes arriving in Guangzhou, a Beijing-based government agency said today. The unusually high incidence of tainted supplies may lead to tighter, longer inspections, the agency said.

“The Chinese announcement was a concern,” said Dave Marshall, a farm marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois. “Raising that hatchet was enough to weaken prices.”

U.S. export sales have risen 6.7 percent since Sept. 1 from a year earlier, with China buying 57 percent of the total. About 1.228 million metric tons of soybeans already purchased by China has yet to be shipped, about 32 percent of the total of outstanding sales to all destinations, USDA data show.

Futures Premium

Soybean futures for May delivery fell 1 cent, or 0.1 percent, to $10.35 a bushel on the CBOT, after earlier reaching $10.465, the highest since Jan. 12. The most-active contract last week rose 1.2 percent, the fourth gain in five weeks.

The premium of May soybean futures to the July contract fell to 3.5 cents today from 5.5 cents yesterday and the lowest since April 7.

Cash-soybean prices also fell relative to futures at other major shipping points, USDA data showed. The so-called cash basis fell as much as 3 cents a bushel at export terminals in Toledo, Ohio, and by as much as 5 cents at barge loading terminals in southern Iowa; Cincinnati; Memphis, Tennessee; and St. Louis, the government said.

“No one wants to get caught holding supplies with the current inverted market,” Marshall said. “Gulf demand usually slows as crops in South America become available” in April and May, when harvesting is finished in Brazil and Argentina, Marshall said.