Bottom Line: China’s Oct and Nov soybean imports were a record 14.54 MMT vs 13.05 MMT a year ago. However, soybean shipments to China made by the principal exporters in Nov and Dec are estimated to be 14.2 MMT vs last year’s record of 15.0 MMT. Combined, China’s soybean imports in the first third of the year (Oct-Jan) are estimated to be 29.5 MMT vs last year’s record 29.7 MMT. If this estimate is correct, China’s soybean imports will be lagging behind the “average” pace needed to meet the USDA’s projection for a record 97 MMT vs last year’s 93.5 MMT. China imposed tighter restrictions on foreign material in December and that may have been the reason for the recent sharp slowdown in the pace of exporter shipments. We probably won’t have a clear picture of China’s soybean import demand until after the seasonal lull occurring around the time of Chinese Spring Festival in mid-Feb.
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China’s November imports were 8.68 MMT. That’s a record and up from October’s 5.86 MMT. Soybean shipments to China made in November by the principal exporters is estimated to have been 8.47 MMT. We expect that these November shipments will make up the bulk of what China will report as imports in December. The chart below depicts our estimate for exporters’ shipments in November. We’ve also included a preliminary estimate of December exporter shipments (which we assume will be reported by China as “official” imports for January). Based on ship lineups as of December 22, we project that December exports to China will be 6.52 MMT. That’s down from last year’s December shipments of 8.15 MMT.
The chart below shows China’s monthly soybean imports last year (red triangles) and exporter shipments last year (green squares). Values for monthly imports are read off the right axis. The thick blue line is the 5-year average of monthly imports as a percent of total annual imports. Over the last five years, on average, monthly exports establish a Fall peak in November; decline into the Spring Festival holiday; then set a seasonal high in early Summer. 2017/18 exporter shipments are the black squares. Our estimate for exporter shipments in November and December are denoted by the black cross-hatched squares.
The chart below depicts monthly cumulative shipments from the principal exporters in the previous month (red squares). China’s cumulative official monthly soybean imports are depicted by the black circles. On a month-to-month basis, there can be large differences between estimated imports (based on exporter shipments in the prior month) and China’s official imports. However, we’ve found that, by the end of the marketing year, the cumulative totals of exporter shipments aligns closely with cumulative official imports.
The chart below depicts a seasonal of China’s monthly cumulative soybean imports. Projections for Dec and Jan imports are based on exporters’ shipments made in the months of Nov and Dec. Last year’s official monthly soybean imports are depicted by the green triangles. The solid black line represents what 2017/18 cumulative soybean imports “should be” in order to meet the USDA’s projection of annual imports of 97 MMT. This is based on the 5-year average of cumulative monthly imports as a percent of annual imports. The thin black lines (above and below of the thick middle line) is the standard deviation. By Jan 2018, it looks like China’s cumulative soybean imports will be more than a standard deviation below the “average” pace needed to meet the USDA’s projection. China imposed tighter restrictions on foreign material in December and that may have been the reason for the sharp slowdown in the pace of exporter shipments. We probably won’t have a clear picture of China’s soybean import demand until after the seasonal lull occurring around the time of Chinese Spring Festival in mid-Feb.
