China’s soybean imports rose by 2.9% in July year-on-year, totaling 9.85 million metric tons, according to customs data. This increase was driven by lower prices and concerns about potential trade tensions with the U.S. should Donald Trump return to the presidency. However, this figure fell short of traders’ expectations, which ranged from 12 million to 13 million tons.
For the first seven months of the year, China imported 58.33 million tons of soybeans, reflecting a 1.3% decline compared to the same period last year. This slight decrease is attributed to an oversupply of soybeans in the market, compounded by weak demand for animal feed.
The current market dynamics may impact China’s soybean appetite during the fourth quarter, traditionally a peak season for U.S. beans. Soybeans are primarily processed into meal for livestock and oil for cooking.
Crush margins in China have been negative since late May, with processors in Rizhao reportedly losing over 500 yuan ($69.59) for each ton of soybean processed. This has been exacerbated by declining demand for pork and other protein sources, as Chinese consumers cut back on spending amid a sluggish economic recovery, prompting livestock breeders to reduce herd sizes.
In the U.S., soybean futures are trading near their lowest levels since October 2020, influenced by favorable weather conditions for crops and concerns about a potential economic slowdown. Meanwhile, in Brazil, the growth rate of soybean acreage for the 2024/25 season is expected to slow, as futures prices approach a four-year low.