Chinese Soybean Imports in April Climb 10.7% YoY
China's soybean imports in April jumped 10.7% YoY Chinese customs data showed as shipments delayed from March reached the world's top oilseed buyer.
China imported 7.64 MMT of soybeans in April, according to data from the General Administration of Customs. That is up from 6.9 MMT in April 2018, a year earlier, and +55% from the reported 4.92 MMT in March.
Soybean cargoes were delayed to arrive in April to take advantage of a cut in the value-added tax (VAT) on agricultural products effective from April 1.
Imports for the first four months of 2019 were 24.39 MMT, -7.9% YoY.
China assessed a 25% tariff on U.S. soybean imports in July of 2018.
What It Means for the U.S. Farmer: At the moment, we think that the increase in Chinese soybean imports in April should not have much of an impact on the U.S. famer. Dalian board crush is at 5 year lows, the domestic hog herd is contracting and there are no shortages of global oilseed supplies. At FBN we’re focused on future Chinese demand and looking for a bullish catalyst that can be beneficial for the U.S. farmer.
Malaysia Palm Oil Stocks Trend Near Top of Historical Range
Malaysian palm stocks are expected to hover around 3 MMT for the rest of the year, as improved yields from good weather and expanded acreage have helped increase production.
Malaysian production in January, February and March have been at record levels for each of those months.
From the demand side, Malaysian exports have been “flat” on the year and stocks have been building.
Local stocks and tank levels have been steadily increasing to maximum capacity levels and has been pushing prices lower.
Regional biodiesel mandates are growing but are not aggressive enough to stimulate material disappearance.
What It Means for the U.S. Farmer: We believe that the growing Malaysian palm oil production and stocks can be a negative for U.S. soybeans and soybean oil. Because the excess Malaysian and Indonesian crude palm oil (CPO) stocks have to clear in the global export markets we believe that increased supplies of vegetable oil can find demand at lower prices. If CPO and prices continue to decline we believe that palm can crowd-out U.S. soybean oil exports which would be a negative for U.S. soybeans.
As a reminder today, May 8th at 5:30CST FBN is holding a webinar to discuss the May WASDE report. Please join us for this event or contact your FBN FMA for more information.
