HIGHER CHINA SOYBEAN IMPORTS EXPECTED IN APRIL AMID BRAZIL HARVEST WRAP-UP AND HIGH U.S. SHIPMENTS

LSEG trade flows projected China soybean arrivals to increase in April to 9.19 million metric tons (MMT) with 6.36 MMT from Brazil and 2.83 MMT from the U.S. In April, the U.S. soybean arrivals will reach a record high of 2.83 MMT for the month, followed by no less than 1.52 MMT for May. After May, soybean imports from the U.S. are expected to drop dramatically upon the competitions of Brazilian new crop soybeans. April imports from Brazil are projected to decline slightly from last year. However, adequate supply and affordable prices of Brazilian soybeans indicate that China may continue its rapid soybean imports from the country this summer. In addition, the three-year low import prices have increased soybean crushing margins, which may facilitate rapid soybean imports in China.

On the other hand, China hog production is expected to decrease from the year ago due to low pork prices and resulting low profitability of the swine industry. Feed demand may decrease correspondingly. Also, low corn prices and huge Brazilian corn imports, as well as government’s intentions of diversifying feed rations curb demand for soybean meal. Domestic soybean meal/oil prices continue to linger at the three-year low levels, signaling less feed and food demand for soybeans.

Overall, China soybean imports may remain strong this summer, but they are unlikely to reach or exceed last year’s record high level.