The government has offered large quantities of cheap state wheat for sale, to allow feed producers to replace expensive domestic corn. According to the National Cereals and Oil Information Center of China, more than 24 million tonnes of wheat have been sold in the current season ending in May this year, and the volume is expected to increase from 40 million to 50 million tonnes. CNGOIC).
With this amount of wheat, with 4% higher protein content than corn, soybean meal use may drop to 2 million tons, or equal to 5 million tons soy, According to Lin Guofo, senior analyst at the BRIC Agriculture Group. Lin said the government would continue selling the state’s rice at the same time and reduce the quantity of wheat by May.
This could lower estimates of China’s soybean imports, which hit a record high to record replacement hog herds following the effects of African swipe fever last year.
The buying spree affected global prices amid investor concerns about supply. Grain prices rose again this week, with US forecasts for the next planting season below expectations. Some analysts say the estimate for soy is very low, given the strong sugar demand.
With new cases of African swine fever, weak demand for bran has led to a 25% drop in soybeans in recent weeks, from a maximum of 2 million tonnes per week recorded last year, an analyst at Everbright Futures, Hu Xueling said.
Low crushing amounts have led to a shortage of edible oils and may increase imports of products such as soybean oil and rapeseed oil, Hou said. They hope that eating soybeans will improve in the second half.
Total soy purchases from China will be higher. According to CNGOIC, imports are expected to recover in April, following major shipments from the country’s major supplier, Brazil. March shipments were estimated at 5.5 million million to 6.2 million tonnes in February, the lowest level in a year. The Center expects annual imports to remain stable in 2020-21 from 98 million tonnes a year earlier.