The Brazilian soybean FOB market was paralyzed Monday in the aftermath of the G-20 meeting in Buenos Aires, when the US and China agreed to soften the trade disputes that turned global soybean flow upside down earlier this year.
Premiums at the Paranagua FOB paper market for March loading -- a key reference period for the new crop -- was heard earlier Monday at a 20-cent/bushel spread between bids and offers, up from a 2-cent/bu spread Friday.
S&P Global Platts assessed soybean basis in Paranagua for March loading at 64 cents/bu over CBOT March (H) futures Friday, with bids at 63 cents/bu and offers at 65 cents/bu. On Monday, offers were heard mostly unchanged at 63 cents/bu, but bids fell to 46 cents/bu.
For April-May loading, bids and offers were heard around 10 cents lower Monday, with bids at 40 cents/bu and offers at 48 cents/bu, down from bids at 50 cents/bu and offers at 57 cents/bu Friday.
Sources told Platts there was no liquidity in the export market, as statements from the US and China after the meeting between presidents Donald Trump and Xi Jinping were positive for resuming exports, but were not really clear when and how it would happen.
"The market froze really bad. Uncertainty is the strongest player in the market today," said a trader at a Brazilian exporter.
After the meeting in Argentina, the US administration said it would not impose higher tariffs on Chinese imports for 90 days. In return, China will buy an unspecified amount of agricultural, energy and industrial goods from the US.
Earlier this year, China imposed a 25% tariff on US soybeans in response to higher tariffs the US imposed in various industries and products.
Brazil benefited from the trade dispute as it saw the US, the only other major competitor in the soybean export market, virtually being left out of Chinese ports. In response, CBOT futures -- which reflect the US domestic market -- fell, an port premiums in Brazil skyrocketed.
