US Soybean Ship Lineup Surges. Renewed China Buying Expected to Keep the Lineup Elevated in Coming Weeks.

Feb 1, 11:09 am | AgResource Plus | Share this:

Summary:  Next week ’s soybean export inspections are expected to be 1,035,000 MT (38.0 Mil Bu).   If this is correct, that would be up 11% from the previous week’s.  This week’s ship lineup is 1,863,000 MT.  That is up 75% from last week.  This week’s lineup is 19% smaller than a year ago.  There were 32 vessels to-be-nominated (TBN).  That is down 21 from last week but is the 3rd largest figure so far this season.

This past week there were 3 vessels that we could identify that departed for China.  In addition, the destinations of several vessels were unknown.  Also, there are 10 vessels in the lineup that are scheduled to depart for China in the next few weeks. News reports cited US and Chinese officials who said that China would purchase another 5 MMT of US soybeans (in addition to the 5 million purchased a month ago).  When the USDA issues its next WASDE report it is  expected to adjust its projections for US soybean exports and China’s imports. The key to possible changes in the next set of S&D projections is what assumptions USDA makes about the soybeans that have been purchased by China. News reports and industry sources indicate that some (all) of the 5 MMT that was purchased in the first round was crushed.  However, there is speculation that the second tranche will be used to replenish reserves.

Another factor is what assumptions the USDA will make regarding the continued imposition of a 25% tariff on the import of US soybeans. It seems unlikely that USDA would sharply increase China’s soybean imports without the lifting of the tariffs.  Lastly, it may be too late to pencil in the customary US exports to China.  Brazil has already started to harvest soybeans and is expected to have the second largest crop ever. USDA projects that US soybean exports will be down 10.8% YoY.  As of Dec 20, US soybean export commitments were 18.3% below a year ago.  As of Jan 24, US export inspections were down 17.9%.

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As of Jan 31, there were 1.863 MMT identified in the US vessel lineup that were scheduled to load soybeans.  That is up 75% from last week’s lineup (see chart below).  Also, there were 32 ships in the lineup for which there was no tonnage, destination, or commodity cargo noted.  This is the 3rd largest number of vessels this season.  The more vessels that are listed as “TBN”, the more difficult it is to accurately estimate the export lineup for soybeans.

 

 

The chart below plots the 2018/19 ship lineup vs the last two years.

 

 

The chart below plots the 2018/19 number of vessels TBN vs the last two years.  There were 32 vessels that were TBN this year.  That is down 21 from last week but is 7 more than a year ago.

 

 

We can document that 725,000 MT of soybeans were shipped last week.   However, we cannot account for the cargo and destination for an unusually large 14 vessels that were in last week’s lineup but not in this week’s.  Therefore we have added another 310,000 MT to our estimate to bring the upper end of our estimate to 1,035,000 MT.  We expect that “actual” inspections will be at the high end of this range.  Therefore, we project next week’s inspections will be 1,035,000 MT.