Chinese soybean imports slump 8% in July as stocks build

Chinese imports of soybeans fell 8% month-on-month to 8 million mt in July, according to figures from the General Administration of Customs of China, as domestic stocks remain at high levels amid sluggish demand for animal feed.

The figures are down on the 8.7 million mt imported in June 2018 and 20% down on the 10.08 million mt brought in through ports in July 2017, and come as both soybean and soymeal stocks at Chinese ports remain near record highs.

Total soybean imports for the marketing year to date (October through July) now stand at 76.8 million mt, virtually unchanged from the year before and way down on the 5% increase that analyst were predicting at the end of 2017.

A 25% import tariff on US beans has seen soybean prices rise and, coupled with poor Chinese pig margins that has depressed demand for soymeal, helping turn Chinese crush margins negative for almost all of the next six months.

That dynamic has deterred Chinese buyers from locking in forward purchases and seen government bodies write down their soybean import estimates.

With China’s National Grain and Oil Information Centre estimating total marketing year imports at 92.8 million mt and the Chinese ministry of agriculture at 96 million mt, August and September imports will be between 16-19 million mt.

China’s import figures are closely watched by the industry to determine whether and when Chinese crushers will end a virtual boycott of US soybeans, a move that could put upward pressure on futures trading on the Chicago Board of Trade.

With a crush rate of 1.67 million mt and stocks of 8.8 million mt, China has more than five weeks’ worth of soybean consumption.

Both the Chinese ministry and the USDA will put out fresh import estimates for this year and next on Friday.