Discount not discourse to boost U.S. soy sales to EU

By Michael Hogan

HAMBURG (Reuters) – European Union imports of U.S. soybeans will remain strong for economic reasons with talks between U.S. President Donald Trump and European Commission President Jean-Claude Juncker giving them only a symbolic boost, European traders and analysts said.

Trump told reporters after meeting Juncker on Wednesday that the EU would start, almost immediately, to buy a lot of soybeans.

U.S. soybean exporters have been looking to expand sales in markets such as the EU after top buyer China imposed tariffs as part of a trade dispute with Washington.

EU buyers have already been stepping up purchases, with U.S. supplies now available at a significant discount to exports from South America.

“Since the price decline of U.S. soybeans in June 2018, the EU is anyway purchasing more soybeans from the United States for economic reasons and there are no EU import restrictions on U.S. soybeans which can be removed,” said Stefan Vogel, head of agricultural commodity markets research at Rabobank, a Dutch bank that specializes in lending to the agriculture sector.

“I think the statements on the EU increasing purchases of soybeans from the United States are largely symbolic,” he added.

U.S. export prices for soybeans are at least $20 a tonne cheaper than from Brazil for August delivery in northern Europe, traders said.

“It is not the European Commission that buys, but the industry, and traders who look for goods where they are the least expensive for their financial interests,” one European soybean trader said.

“If U.S. soy is cheaper than the Brazilian it will be preferred.”

DBV, an association of German farmers, said it welcomed de-escalation in the trade dispute but did not expect changes in soybean trade.

“In regards to agricultural trade we see especially in soybeans no negotiating leeway for a trade-political agreement as oilseed imports from the United States are already free from customs restrictions,” DBV president Joachim Rukwied said.

The United States has been looking to support farmers hurt by the tariffs imposed on U.S. products and this week announced a $12 billion support package.

(Additonal reporting by Valerie Parent, editing by Nigel Hunt and Dale Hudson)

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