China lifts restrictions on U.S. poultry meat imports
On Thursday, China's customs said that effectively immediately, it was lifting the 2015 ban on U.S. poultry meat imports.
China had banned all U.S. poultry and eggs since January 2015 due to an avian influenza outbreak.
Reopening the market to U.S. poultry meat comes as China faces an unprecedented shortage of domestic protein supplies as African swine fever (ASF) has inflicted.
Chinese chicken imports have surged this year, as the country has been importing cuts like breast meat that is normally in surplus.
Year-to-date 2019 Chinese chicken imports are 548,627 tonnes; +47.6% from 2018.
FBN’s Take On What It Means: At FBN, we believe that China’s reopening to U.S. chicken imports effective immediately can be a big win for the U.S. farmer. Reported USDA weekly broiler egg sets and chick placements surged during September and October. We believe that when the U.S. poultry packers start exporting to China, this can be supportive of future broiler numbers which can create positive demand for soybean meal, DDG, and corn.
NOPA’s October Crush Estimate: 166.8 Million Bushels
According to analysts surveyed by Thompson-Reuters, National Oilseed Processors Association (NOPA), US soy processors likely increased the crush pace to 166.8 million bushels (MBU) in October.
If realized, this estimated 166.8 MBU would be +9.3 higher than September but below the record set in October 2018.
NOPA members process approximately 95% of the US’s soybeans.
The crushing pace was variable last month as a slow harvest and high-moisture soybeans that need to be dried down or blended with drier beans.
Soyoil supplies among NOPA members at the end of October were projected at 1.420 billion pounds.
Stocks at the end of September stood at 1.442 billion pounds, and 1.503 billion pounds at the end of October 2018.
FBN’s Take On What It Means: If realized, we believe that the estimates for NOPA’s October soybean crush pace represents a healthy improvement from September and can be positive for local basis. Despite challenging replacement and estimated forward crushing margins, we maintain that the growing domestic hog herd and broiler flock is supportive soybean meal disappearance which can be positive for processor demand.
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