——October soybean imports are expected to be close to 5 million tons, a two-year low

October 8 news: China’s soybean imports in October may fall to the lowest level in more than two years, industry sources said, which will exacerbate domestic soybean meal supplies.

Ole Huey, director of advisory services at Sydney agricultural brokerage Ikon Commodities, estimated China’s October soybean imports at 5 million tonnes or slightly less, which would be the lowest import value since March 2020.

Chinese soybean meal prices are expected to hover near all-time highs as feed makers lose money and soybean supplies are tight, two Singapore-based soybean traders said. Huey said crush margins had been negative for several months, leading to lower imports.

Declining Chinese soybean imports could weigh on Chicago soybean futures amid an overall rise in food prices, but record soymeal prices could push pork prices higher. Live hog prices have risen 40% since March.

Most of the soybean meal produced in October and November has been sold out, traders in Singapore said. Those feed manufacturing companies that put off their purchases are now in pain because they have to pay very high prices.

China’s soybean imports have fallen month by month in recent months as processing profits are low and have been in the red for most of the time since mid-April. As of September 30, the Rizhao soybean processing plant lost more than 86 yuan per ton of soybeans processed.

China’s soybean imports are estimated to have fallen to 5 million tonnes in September. Data released by customs at the beginning of last month showed that China’s soybean imports in August were 7.17 million tons, down from 7.88 million tons in July and 24.5% lower than that in August last year. From January to August, China imported 61.33 million tons of soybeans, down 8.6% year-on-year.

Singapore-based traders said some oil plants had to shut down and others were operating at well below capacity. Typically, capacity utilization in the crushing industry is around 70% as capacity exceeds demand.

Traders say feed producers are reducing the soymeal content in pig feed from the usual 30 percent to less than 20 percent. Nonetheless, Chinese soybean imports are expected to rise later this year to make up for the shortfall in soybean meal supplies. Chinese soybean imports could rise to 9 million tonnes in November and about 10 million tonnes in December as the U.S. soybean harvest hits the market.