Importers working for EU member states have purchased US soyabeans to crush and export soyabean oil back to the USA, trade sources told AgriCensus.
Several sources quoted in the 9 June report confirmed the trade or said the unusual market move was “highly possible”.
In a flash sales update, the US Department of Agriculture (USDA) reported old crop soyabean sales of 165,000 tonnes to Spain on 6 June, and many market participants believed those volumes were in-house deals aiming to re-export soyabean oil to the USA after the beans were crushed in Europe, the report said.
“We thought that was a joke after the Spain announcement, but we’ve learned that it could work,” Futures International’s Terry Reilly told AgriCensus.
Large companies could be taking advantage of idle crushing capacity in Europe and high demand from the US biofuels sector to make this cross-border flow economically viable despite the high freight costs involved, the report said.
On 9 June, the USDA announced another round of old crop US soyabean sales, this time with 197,000 tonnes sold to unknown destinations.
While there was no confirmation this could also be heading to Europe to be crushed and re-exported to the USA, it could be the case, according to some sources.
This cross-border trade dynamic could be an ongoing trend, the report said.
“Depending on tariffs and the certification process, this could be a frequent thing in 2023/24,” Eduardo Vanin, the head of analysis at Brazil’s brokerage Agrinvest, told AgriCensus.
However, this could be a short-term solution before the USA’s new soyabean crushing capacity came online, according to some sources.