China has reduced its forecasts for soybean imports and domestic crush demand in 2020/21, as poor crush margins constrained buying interests and usage of soymeal in feed decreased, the monthly update to China’s Agriculture Supply and Demand Estimates (Casde) showed Thursday.
China’s soybean imports for the 2020/21 marketing year are expected to reach 98.6 million mt, down by 1.84 million mt from the 100.44 million mt estimated in the prior month.
“The main reason is that crush margins have been decreasing since July. Crush volumes also dropped, while the imported soybean inventory has increased to the highest level this year,” the report said.
“Meanwhile, China’s importers postponed their purchases on an expectation that new crop prices would fall after the US harvest,” it added.
Soybean consumption is expected to fall to 113.26 million mt, compared with 116.26 million mt estimated in the previous report, as the forecast for crushing demand was lower by 3 million mt to 95 million mt.
“Profits for pig breeders have fallen significantly since March this year, and the usage ratio of soymeal in feedstuff also declined, so soybean consumption is lower than previously expected,” Casde said.
Meanwhile, China’s Ministry of Agriculture and Rural Affairs (MARA) cut its estimate for edible oil output in 2020/21 to 28.51 million mt, down by 520,000 mt from the previous forecast, as production of sesame – a major oil crop in the country – was impacted by July’s flood in Henan.
For the new marketing year, China maintained its forecast for soybean output and imports in 2021/22 at 18.65 million mt and 102 million mt, respectively.
At the same time, estimates for corn imports and production in 2021/22 were also unadjusted at 20 million mt and 271.81 million mt, respectively.