China-US trade talks weigh on CFR China Brazilian soybean pr

Brazilian soybean prices in China fell Tuesday on expectations that continued China-US trade talks could lead to the removal of the 25% tariff on imports from the US. 

Prices reached $371.66/mt, CFR China, the lowest since S&P Global Platts started assessing the market in May. 
The removal of tariffs would send large volumes of US soybeans to China, competing with imports from Brazil, market participants said. 

"Brazilian soybean [prices] have kept dropping since October 2018," a trader said. "Farmers in Brazil were worried that US soybeans could flood into China if and when the 25% tariff is removed. On top of that, Chinese crushers were affected by the poor sales in soybean meal domestically, and it contributed to the weaker demand for soybean imports." 

A final round of negotiations between China and the US is expected at the end of January, when Chinese Vice President Liu is likely to visit the US together with high rank officials, following talks in China on January 7-9. 

China imported 5.72 million mt of soybeans in December, according to Chinese customs data, the lowest December volume since 2011. An outbreak of African swine fever in China has also dented soybean demand for animal feed. 

"China is suffering from both African swine fever and poor crush margin," a trader said. "If things don't go well, demand for soybean imports will remain weak."

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