China's soybeans import were the highest on record for the month of August, according to customs data, as the country's pig herd continues to recover from the African swine fever epidemic, market sources said.
China purchased 9.6 million mt of soybeans in August, compared with 9.4 million mt in August 2019 and 10 million mt in July this year, Chinese customs data showed Sept. 7.
Rising soybean imports by China – the world's largest oilseed purchaser -- is seen as a boost to an already rising soybean price on weather concerns in the US. A dry August in most parts of the US Midwest and China's purchases of US beans in recent weeks have supported soy futures for the past few weeks.
November soybean futures are currently trading around $9.68/bu, an eight-month high, and look set to progress towards $10/bu in the coming weeks, an analyst said Sept. 7.
High oilseed futures prices have also supported port loading prices.
S&P Global Platts assessed SOYBEX FOB New Orleans for October loading at $396.46/mt on Sept. 4, up 9% month on month.
The continuing recovery in China's swine and poultry production growth are expected to push up soybean demand in 2019-20 and 2020-21, market sources said.
China's soybean imports in the 2019-20 and 2020-21 marketing years (October-September) are forecast to touch 98 and 99 million mt respectively, significantly higher than 82.5 million mt bought in 2018-19, the US Department of Agriculture said in its latest supply and demand report.
China lost over 50% of its swine population to the African swine fever epidemic, which started in August 2018. Following quarantine measures and culling of more than 200 million pigs, the country's pig population has been on the path to recovery since late 2019.
In early June, Chinese agriculture ministry data indicated the eight consecutive months of sow inventory expansion and four months of growth in the hog herd, with a net growth of 38 million hog heads between the end of 2019 and May 2020.
With robust domestic demand for soybean based animal feed, Chinese crushers have ramped up their oilseed purchase from the US and South America.
For October and November, its soy import coverage is estimated to be almost complete, a Chinese analyst said. In fact, Chinese buyers are now mostly focused on booking December shipments from the US and March shipments from Brazil.
Chinese soybeans buyers are expected to continue their pace of imports in the coming weeks to cover for market uncertainties, market sources said.
Despite the ongoing diplomatic tensions between Beijing and Washington, China is expected to continue purchasing US soybeans in the fourth quarter as Brazilian supply has dipped, a Chinese consultant said.
