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Analysis: China cuts US soybean imports after delays in shipping clip export window

BEIJING/CHICAGO, Dec. 3 (Reuters) – Imports of Chinese soybeans from the United States are expected to fall sharply from last season in 2021/22 after loading delays after Hurricane Ida.

An early soybean crop in Brazil also shortened the export period from the US to China, the world’s largest soybean buyer.

According to analysts and top importers, China’s total imports of US soybeans for the marketing season that started on September 1 could fall by at least 20% to less than 30 million tons.

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More than half of those sales usually go to China, which in turn makes about 70% of its U.S. soybean deals during the post-harvest period from September to December.

US soybean exports to China by harvest year

But this year, the aftermath of Hurricane Ida — which hampered crop loading at key U.S. ports for several days in September — resulted in an 81% drop in China-bound shipments in that month from the previous year, according to data. from the United States Department of Agriculture.

Furthermore, the main drivers of Chinese soybean demand – crushing and production margins for pigs – came back just during the peak US harvest, quenching China’s hunger for US supplies.

China’s soybean and pork production margins fell at the start of the US soybean export season

US shipments soared to more than 10 million tons in October, according to Refinitiv data, but are now facing the prospect of an earlier than usual start to the 2022 export season from Brazil, the world’s largest soybean producer.

US Seasonal Soybean Exports

“The US export season (soybeans) got off to a bad start this year. Crush margins were low and demand was not good at the time,” said Bai Jie, an analyst at COFCO futures.

“Then there was the impact of Hurricane Ida. And some of the US market share was depressed by Brazilian beans,” Bai said.


US soybean exports to China in 2020-21 were the strongest since the 2016-17 season, in part due to a delayed start to Brazil’s 2021 export season, which boosted US sales.

“U.S. beans won’t have such a chance in the coming months as Brazilian bean planting moves quickly this year, meaning plenty of beans will be shipped to China in the first quarter of 2022,” said Zou Honglin, an analyst at the agricultural division of Mysteel, a China-based commodities consultancy.

US soybeans have also faced headwinds, with export offerings fairly close to those from Brazil, where freight costs to China are lower.

US vs Brazil soybean prices and freight to China

In addition, Brazilian soybeans offer better crush margins for Chinese soy processors, thanks to higher average protein levels in Brazilian soybeans. According to Mysteel, margins for US soybeans shipped from the Pacific Northwest for February delivery are about 500 yuan ($78.49) per tonne, compared to 684 yuan for Brazilian beans.

“Brazilian beans are just cheaper, and price is king,” says an Asia-based trader with a top trading house.


Chinese soybean importers nearly completed purchases in December and are now replenishing January and February needs just as Brazil’s export season gets underway, a US exporter said.

Gulf Coast soybean shipments in January were offered at around $500 a ton FOB late last month, with an additional $78 or $80 a ton for freight to China. Brazilian soybeans cost about $520 per tonne of fob, with freight about $60 per tonne, he said.

“From an American perspective it was a bit disappointing. Brazil is grabbing a little more in our export window every year,” said the exporter. “Our window is closing.”

China’s soybeans arriving in November-December will be mostly US shipments, but Brazilian shipments are expected to soar to more than 6 million tons in January-March, according to Mysteel’s Zou.

That would more than quadruple the 1.35 million tons in the first quarter of 2021.

With China expected to account for nearly 60% of all soybean imports this season, US exporters won’t be able to find a single major buyer to replace it. Europe, Mexico, Argentina, Egypt and Thailand are the next five largest importers, according to the USDA, but together buy only a third of China’s total.


Pig production margins will be an important determinant of the ultimate demand for soy in China next year.

A surge in pork production in 2021 caused margins to collapse to record lows, reducing industry demand for soybean meal. read more

But there is now a recovery in pork prices and hog margins, and if it continues, overall soy consumption will rise.

Pork prices in China versus pig production margins

But since Brazilian beans have a higher protein content anyway, South American exporters will benefit most from a further increase in demand.

“Pressure on American beans could only increase in the future as long as the weather in South America remains normal,” said a soy trader in Shandong province, a large livestock farmer in China.

($1 = 6.3706 Chinese Yuan Renminbi)

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Reporting by Hallie Gu in Beijing and Karl Plume in Chicago; Additional coverage by Ana Mano in Sao Paolo; adaptation by Gavin Maguire and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.