China's soymeal glut raises demand doubts ahead of US soybean export season
BEIJING/SINGAPORE (Reuters) -China's appetite for soybeans is likely to weaken during the peak U.S. marketing season later this year, as record imports earlier in 2025 and tepid demand from animal feed producers have pushed up soymeal inventories at home, trade sources said.
The world's biggest soybean importer has yet to book U.S. cargoes for the fourth quarter, with traders closely monitoring talks in Stockholm aimed at resolving longstanding economic disputes at the centre of the U.S.-China trade war.
A slowdown in Chinese demand could pressure Chicago soybean futures, which are already down for a second consecutive week on expectations of a bumper U.S. harvest. [GRA/]
China's soymeal futures fell for a fourth straight session on Tuesday amid ample supplies.
In the physical market, spot soymeal in north China was quoted at 2,925 yuan ($408) per metric ton, down 6.5% from 3,130 yuan a year ago, said Wang Wenshen, an analyst at Shandong province-based consultancy Sublime China Information.
"If third-quarter prices stay weak and crushers face losses, fourth-quarter soybean purchases may fall short of expectations," Wang said. The last quarter of the year is typically the main U.S. soybean marketing season.
China's overall soybean imports hit a record high in May and their second-highest level in June, boosting oilseed processing and leading to a buildup in soymeal inventories, traders said.
CRUSHER SHUTDOWNS
The surplus is straining China's crushing plants, with some already shutting down due to storage constraints.
"Small-scale shutdowns have already begun at crushing plants in regions like south China primarily because soybean meal has accumulated with no room for more stock," said a Shanghai-based trader, adding that a broader suspension was "highly likely".
Crush margins in Rizhao, China's main processing hub, have been negative since mid-May.
The glut has been worsened by weak demand from animal feed producers amid sluggish meat consumption in the world's top pork market.
Crushers will face "huge soymeal stock pressure" over the next one to two months, said Cheang Kang Wei, vice president at StoneX in Singapore.
Authorities have pledged to cut breeding sow numbers, curb new capacity, and reduce soymeal use in feed to stabilise meat prices after steep declines this year, measures analysts say will further limit soymeal consumption.
China's purchases of Argentine soymeal, amid high tariffs of U.S. beans, in the last few weeks are likely to add to the glut.
"Even with such big supply of soymeal in the local market, it is profitable to import meal from Argentina," said a Singapore-based trader at an international trading company.
"This will only add to the stocks of soymeal."
A trade deal with Washington could shift buying patterns.
"If a trade deal is reached, Chinese buyers could resume U.S. purchases for the fourth quarter, as prices are favourable without tariffs," said Johnny Xiang, founder of Beijing-based AgRadar Consulting.
($1 = 7.1767 Chinese yuan)
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