While China purchased the bulk of its soybean shipments from Brazil in earlier months, the Asian’s country’s focus is expected to shift toward US soybeans in coming weeks on tighter Brazilian supplies, said the analysts.
Indeed, they noted that US soybean prices have been trending higher since August amid strong demand from China.
Backed by a weak currency, Brazilian soybean sales to China in 2020 were reported at 55MMT between January and August, up 26% on the year, said S&P Global Platts' note, referencing Brazil's latest trade data.
“Chinese state-owned companies continue buying US soybeans despite lower crush margins,” said the Platts team.
US soybean export sales so far for MY 2020-21, which runs from September 2020 to August 2021, were at 35.5MMT, according to a USDA report released on September 17. That volume represents a jump of 192% year on year, with the majority of purchases done by China. That USDA data can be accessed here.
The continuing recovery in China's swine and poultry production growth is expected to push up soybean demand in 2019-20 and 2020-21, said Platts, citing market sources.
China's pig herd increased 31.3% in August compared with a year ago, while the sow herd was up 37%, Chinese government officials said mid-September. Part of that boom comes from 2,030 new large-scale pig farms that began production in August, with more than 11,000 large-scale farms completed since the start of the year, according to Reuters.
Boosted by that rising pig herd, China's soybean imports in the 2019-20 and 2020-21 marketing years, which run from October to September, are forecast to touch all-time highs of 98MMT and 99MMT, respectively, the USDA forecast in August.