Chinese soybean imports from U.S. to hit 'historic lows' by November, but may increase a little in early 2019

"China will almost entirely replace its soybean imports from the United States with Brazilian beans and other origins in the upcoming season, but may run out of the oilseed in early 2019," Hallie Gu and Dominique Patton report for Reuters. citing an executive of a top soybean processor. "The world's top buyer of soybeans bought about 60 percent of U.S. soybean exports last year, but has been mostly out of the market since Beijing imposed a 25 percent tariff on U.S. beans on July 6 in retaliation for U.S. tariffs on Chinese goods."

Last year China imported 27.85 million metric tons of soybeans from the U.S., but this year will only import 700,000 tons, according to a spokesperson for the Jiusan Group, a Chinese company that produces, processes and sells soybean products. China's overall soybean imports could drop to about 85 million tons this year, down about 11 million from last year, said the spokesperson and one from another company that crushes soybeans and processes them into oil and meal.

Because China is shifting more of its buying to Brazil, supplies could hit historic lows by November and run out by February or March of 2019 when Brazilian soybeans are in short supply. That could trigger "very high" prices for soymeal and hurt demand in early 2019. Some private companies may buy soybeans from the U.S. then, the Jiusan spokesman told Reuters. To make up for the drop in soy imports, China is expected to increase imports of alternative seed meal products, boost domestic crushing volume and sell some from state reserves, Reuters reports.