China Likely to Reduce Soybean Imports

Chinese importers of soybeans is likely to cancel some shipments of merchandise as processing margins and lower soybean meal prices fall, an official state grain trader Cofco Ltd., said.
China is the leading global soybean imports, so that any signal of the Asian nation is to reduce imports could push world prices. U.S. equity futures soybeans for May delivery fell 1.5% to $ 13.72 a bushel in mid-morning trading on the Chicago Board of Trade.
Imports of soybean from April to September, the second half of the marketing year for harvest is expected to drop from a year ago, said Liu Ni, Cofco manager for oils and oilseeds information, talking International oil to China, plants, oilseeds conference on Monday.
Imports in the first half of the campaign, which ran from October to March rose 20% over the previous year. For the full year, China is expected to import 53 million to 54 million metric tons of soybeans, down slightly from 54.5 to 54.8 million tons expected earlier, Ms. Liu said.
The lower estimate is driven by lower demand for soybean processors, known as crushers, that the process of cultivation in the cooking oil and meal for animal feed. Ms. Liu said domestic crushers are operating at 40% of its processing capacity in the middle of the narrow operating margins and lower prices of flour. Crushers lost about 300 yuan ($ 45.90) ​​per ton of imported soybeans, but the loss is expected to decrease with the delivery of soybeans in South America next month, he said.
China is the largest export market for U.S. soybeans, however, recent data from the U.S. Department of Agriculture show cooling sales, with tenders for the last week of March next at 19% below the average of four weeks. However, U.S. inventories Soy remain low, probably preventing a sharp sell-off in soybean futures.
In China, most importers have suspended imports of distilled dry grains, feeding a product that competes with soybean meal, since March, after an anti-dumping investigation initiated by the Chinese authorities, Ms. Liu said.
China's imports of palm oil will also be slightly lower at 6.2 million tonnes against 6.4 million-6, 5 million tons forecast earlier, said.
Ms. Liu said this is despite the domestic oilseed output probably fell below 15% of nine million tons this year. The government now has about 1.5 million tons of rapeseed oil, far below after releasing about 1.6 million tons of rapeseed oil since October last year, and 2.2 million tonnes of soybean oil reserves.
However, commercial stocks of edible oil were high in about three million tonnes due to weak market sentiment because it is the off season and because of government price controls, he added.

(Source: http://online.wsj.com/article/SB10001424052748704529204576256790005248046.html)