Weak China feed demand forces delays on 10 cargoes for July

International soybean trading houses and crushers are delaying some soybean cargo deliveries for up to a month as weak animal feed demand in China forces crushers to cut their production, five trade sources have told Agricensus.

The traders said 10 South American soybean shipments heading to China, booked by three different trading houses, have been rolled back from July arrival to August.

The delays come as demand from crushing plants has been falling due to the ongoing African swine fever (ASF) outbreak dampening animal feed demand.

“I heard Cofco did and it was because demand wasn’t good recently and they had to push them [the orders] back,” said one China-based trading manager.

Most of the soybeans imported into China are crushed to make soymeal, providing protein to the country’s massive volume of pigs.

“Demand for soymeal in China has been poor recently, and crushers’ production volume was cut. Hence, they do not need as many beans,” the same manager added.

International agri-major Louis Dreyfus and major trading house Olam were said to be the other two companies that have rolled cargoes from July to August, according to a second Chinese soybean trader.

One other China-based broker also heard the market rumour and said, “five to six shipment certainly did [roll]”.

The pace of cargo-buying from Chinese crushers has slowed down drastically in the past two weeks, as poor crush margins and weak feed demand bites.

China normally buys 15-20 cargoes a week when demand and margins are good, but that volume has shrunk to 5-10 cargoes in the past two weeks as margins deteriorated sharply.