China’s soybean imports were the second highest on record in July as processors increased purchases of cheaper Brazilian supplies and demand for hog feed recovered.

The country imported 10.09 million tons last month, up from 8.64 million tons a year earlier, and near June’s record of 11.16 million tons, according to customs data. Purchases were just above the 10.08 million tons in July 2017. Imports in the first seven months rose 18% on year to 55.14 million tons.

China also imported a record amount of meat and offal in July as the world’s top pork consumer boosted purchases from abroad to meet a deficit and cool record pork prices after outbreaks of African swine fever slashed herds.

Key Insights

  • Chinese imports are seen staying strong through August, as crushers buy aggressively from top supplier Brazil on healthy crush margins
    • China’s 2019-20 soy imports may hit a record for the marketing year of 96.5 million tons, as purchases remain robust amid a recovery in domestic hog breeding
  • China has shifted to U.S. soybeans to cover needs in fourth quarter as Brazilian supplies dry up and prices become less competitive
    • China still needs to buy 25-26 million tons of soy this year, according to Archer-Daniels-Midland Co.
    • China’s American farm purchases reached only 20% of the 2020 goal during the first half, which could lead it to step up buying of U.S. grains
  • China’s increased hog inventories and a higher number of breeding sows will likely lead to growth in U.S. soybean imports