Chinese soybean importers have agreed with suppliers to scrap deals for two to three 60,000-metric-ton U.S. cargoes in the past week as prices rally and inventories pile up, two traders told Reuters News Service on Monday.

Two of the estimated three cargoes due to have been shipped from New Orleans have instead been resold on the domestic U.S. market, where CBOT soybean futures rose to an eight-month high last week.

"A total of three cargoes washed out. Buyers decided to wash out as there are too many beans in the market," said one Singapore-based trader who regularly trades with China. "The seller sold the cargoes in the domestic market."

A second trader based in China also confirmed the washouts, which come as the world's top buyer grapples with oversupply following record soy imports in recent months and shrinking crushing margins.

The Beijing-based trader told Reuters: "Two or three cargoes were washed out, for June and July shipment. The margin right now is negative and they don't expect the outlook to be promising."

Traders said China is likely to have shipped in a record 4.5 million tons (mmt) of soybeans in May and is expected to import similar quantities in June. Trade estimates are higher than those from China's Commerce Ministry, which expects May imports to reach 4.29 mmt and June 4.11 mmt.

Weak demand from the animal feed industry and lower margins may prompt more buyers to delay shipments in June, but sellers are unlikely to agree.

"It is not easy to washout, origins are full of beans," the Singapore-based trader said. "They have made arrangements for cargoes to be delivered to the port and then to the destination."

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.