Only two weeks into 2019, and ClipperData is already beginning to see wide disparities in Chinese soybean offtake versus historical patterns. Week 1 offtake for China totaled 656,000 tonnes in 2019, compared to 1.12 million tonnes in 2018 and 1.45 million tonnes in 2017.
Week 2 offtake totaled 1.26 million tonnes as compared to 1.93 million tonnes in 2017 and 1.88 million tonnes in 2017. To date, week 3 offtake is 374,240 tonnes versus 1.63 million in 2018 and 1.68 million in 2017.
Not only are total offtake volumes down, but so far this year every vessel except three have originated from Brazil. The Brazilian port of Itaqui in the Northern Arc plus southern ports of Paranagua, Rio Grande and Sao Francisco do Sul have all loaded vessels to China. Out of the 4.68 million tonne offtake by China in the first three weeks of 2018, 3.62 million tonnes were of US origin. We have seen only one vessel originating from the US offload to China at this point in 2019.
There has been talk that China has bought up to 5 million tonnes of US soybeans in the last month as trade negotiations take place. This has a nice ring to it, but in our view, these are goodwill purchases for Chinese state-owned storage and nothing more. These trades in no way portray real demand within the country, which has clearly diminished due to African Swine Fever, the trade war and an overall slowdown in economic growth. In addition, global grain and feed ingredient loading to start 2019 is down substantially from 2018 and 2017.
The soybean market added about 80 cents per bushel from mid-September 2018 to mid-December 2018. With favorable weather conditions in Argentina, fair conditions in Brazil and increased soybean loadouts expected in Brazil by February and March, futures markets will have a difficult time sustaining upside momentum from here given the backdrop of weaker Chinese demand.