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October 13, 2020 | FBN Insights | Kevin McNew

China Soy Imports Up In September

China’s soy demand due to increased livestock numbers and government restocking is likely to continue

China Soy Imports Up In September 

  • China imported 9.8 million tonnes of soybeans in September, up 2% from 9.6 million tonnes in August.
  • September arrivals were up 19% from 8.2 million tonnes in September 2019. 
  • Cumulative soybean imports have surged 15.5% year on year in the first nine months of 2020 to 74.5 million tonnes.
  • Soy crushers had been ramping up imports of Brazilian beans earlier on good crush margins. 
  • Soybean inventories in China are at record high of 7.1 million tonnes as of October 11 after months of tight supplies.
  • US shipments are expected to increase next month, and continue to rise until South America’s next harvest in February.

FBN’s Take On What It Means: China’s soy demand due to increased livestock numbers and government restocking is likely to continue. USDA just raised Chinese crush 1 mmt to 91.5 mmt. China’s activity paused recently as the country took its Golden Week holiday, and the market is looking for further soy purchases as they return from the break. 

Ukraine Grain Forecast Down 

  • Hot and dry conditions have affected production, especially in eastrn Ukraine, and are leading to lower forecasts for the wheat, corn and barley harvest.
  • Ukraine's grain traders union UGA revised down the corn crop forecast to 32.5 million tonnes from 35.3 million last month.
  • The corn export forecast was decreased to 27.2 million tonnes from last year’s 29.2 million tonnes.
  • USDA’s latest forecast is for Ukraine corn production of 36.5 million tonnes with exports of 30.5 million. 
  • The union cut the 2020 wheat projection to 25.3 million tonnes from 26.6 million tonnes last month. 
  • Barley production was forecast down to 8 million tonnes from 8.3 million  with exports projected at 4.2 million tonnes.

FBN’s Take On What It Means: The USDA decreased its Ukraine corn production forecasts in the last report, but still remains 4 million tonnes above the consensus of private forecasters projections in the 32-32.5 million tonne range. Tightening world stocks should help to support prices, and further cuts in Ukraine exports are likely to help drive some demand to the US. 

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