September 26, 2019 | FBN Insights | Kevin McNew

Soybean Exports to China Surge in August

Chinese import volumes highlight importance of U.S. soybeans to Chinese crushers

U.S. Soybean Exports to China Surge 533% YoY During August

Chinese customs data released this week showed that reported soybean imports from the U.S. during August rose 533% from August 2018 as cargoes purchased during an easing in the trade dispute between the countries cleared customs.

China reported importing 1.68 MMT of soybeans from the U.S. during August, +265,377 MT YoY, and an 84% increase from July.  

During August, soybean imports from Brazil were 6.68 MMT, down from the 7.95 MMT imported during August 2018, but up slightly from 6.4 2 MMT imported during July.

Soybean imports from Argentina increased to 654,555 tonnes, +19.5% YoY.  

This week China gave new waivers to several non-state owned importers to buy U.S. soybeans that are exempt from retaliatory tariffs, in a goodwill gesture ahead of high-level trade talks in October.

FBN’s Take On What It Means: This is a positive, if not stale, signal for the U.S. soybean export program. We believe that reported Chinese import volumes during August continue to highlight the importance of U.S. soybeans to Chinese crushers.                          

USDA’s September Hogs & Pigs Report Estimates: U.S. Herd Still Expanding

On Friday, Sept. 27 the USDA releases their quarterly U.S. Hogs & Pigs report.  Pre-report estimates have September 1 all hogs and pigs inventory at +2.9% YoY. The reported USDA all hogs and pigs on June was +3.6% from 2018.

Analysts are estimating that the June-August pig crop is +2.4% from the same months during 2018 with most of the increase accounted for by a continued growth in sow efficiency.  

Pigs per litter, sow efficiency, is estimated to increase by +2.4% YoY.  Sow efficiency figures continues to impress and has been a highlight of recent reports.  The +3.5% YoY increase in pigs per litter in the June Hog & Pigs report was the biggest YoY percentage increase since the spring of 2015 when productivity was recovering from the consequences of porcine epidemic diarrhea (PED) in 2014.

Sows farrowing during June-August time period is estimated at +0.2% YoY.

Sows kept for breeding are estimated at +1.3% YoY.  

Market hog inventory is estimated at +3% YoY. 

FBN’s Take On What It Means: Using the pre-report estimates, the U.S. hog herd continues to show signs of expansion which is a positive for corn and soybean meal demand.  At FBN we’re interested in the USDA’s state level hog numbers. Meaning, given the contracting corn and soybean supplies in key hog producing states like Illinois, Ohio, Indiana we are interested to see if the recent rise in local corn basis has forced either a state level or a regional hog liquidation.  If such a scenario were to occur this could suppress future corn demand.       

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