Soybean traders will be watching to see whether recent futures declines are enough to spur renewed interest in U.S. soybeans from Chinese buyers, who have delayed or cancelled some previous purchases over the past couple of weeks.
A weekly survey by the China National Grain and Oils Information Centre (CNGOIC), released on Friday, indicated traders in China were expected to keep imports at a low level in coming weeks due to sufficient domestic supplies, but attitudes may change with lower prices.
Last week's surge in Chicago Board of Trade soy prices led more buyers to hold off making purchases, the CNGOIC said. High prices have undermined crush margins for Chinese processors along with slowing domestic feed demand.
Official Chinese customs data released on Friday showed China’s May soybean imports at 3.52 million metric tons (mmt) down from 3.71 mmt in April.
The May soybean imports were up 1.2% from a year earlier, but were well below earlier trade expectations. China's commerce ministry on June 8 had estimated May imports at 3.96 mmt but had earlier pegged them at 4.29 mmt.
The customs data also casts doubt over the commerce ministry's forecast for record soybean imports of 4.62 mmt in June.
USDA’s weekly export sales report for the week ended June 4 showed soy cancellations by Chinese buyers for the second week in a row.
USDA reported China cancelled another 55,000 tons of U.S. beans on the week, bringing total cancellations over two weeks to 167,600 tons (6.15 million bushels). During that same period, sales of 116,800 tons (4.3 million bushels) to an unknown destination were canceled, which may also have been destined for China.
U.S. exporters are still shipping soybeans to China. Weekly U.S. soybean export inspections destined for China did rebound to 7.7 million bushels during the week ended June 11, after dropping to zero the previous week.
While export demand for U.S. soybeans has slowed recently, there is evidence domestic demand has improved slightly due to strong margins for U.S. crushers and reduced export competition from South America.
The National Oilseed Processors Association reported on Monday morning that its members crushed 142.2 million bushels of soybeans in May – up from 134.1 million in April, and above trade expectations.
Prereport trade estimates of the NOPA crush averaged 137.2 million bushels in a range from 134.5 million to 139.5 million.
The increase in the monthly crush over April was partly due to the fact May held one more crush day, but the daily crush rate did rise in May indicating a modest increase in processing activity.
NOPA member soyoil stocks were pegged at 2.684 billion pounds, down from 2.710 billion in April, and below the average of trade expectations, which was 2.690 billion.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.