Miller Magazine Issue: 155 November 2022

time of the year, overall imports for the first nine months of the year are still down 6.6% compared with last year at 69.04 million tonnes. The high prices and lacklustre demand from the livestock sector earlier in the year curbed the appetite for soybean pur- chases. The increase in September arrivals came largely from the United States, which shipped 1.15 million tonnes to China last month, up from 169,439 tonnes in September 2021, cus- toms data showed. Imports from Brazil slipped to 5.58 million tonnes versus 5.936 million tonnes last year. In China, the harvesting of soybeans continues. As for protein, the situation has not changed, there is still a large number of beans with a protein of 35%-37%, and buyers are actively looking for soybeans with a protein of 39.5%. The share of low-protein soybeans is about 70%, while soybeans with protein from 39% are only about 20% and about 10% of unripe beans with protein are about 36%. In terms of forecasts, about 60% of market participants believe that the price of soybeans will continue to decline, based on the fact that there is a significant amount of supply in the market, plus large volumes of low-protein cheaper soybeans will be available to re- plenish stocks from for the pur- pose of cost reduction. Demand for soybeans remains at a low lev- el, one of the only factors that pro- vide price support is high prices for imported beans and an increase in the cost of soybean production domestically. Over the next months, we are likely to see a major difference between the prices of high-protein and low-pro- tein soybeans. According to the latest data from the Ministry of Agricul- ture of the PRC, the Chinese government aims to gradually increase the production of soybeans and increase self-suf- ficiency in this crop. By 2025, soybean production should increase to 23 million tons. Based on this, we can conclude that in order to achieve these indicators, it is necessary to interest the peasant to engage in soybeans. In the current season, we are likely to see an increase in purchases from the State Reserve of China, especially in terms of low-pro- tein soybeans, to support farmers. On the issue of pricing, the state will also have to take steps to motivate farmers to increase the area under soybeans. Therefore, we will wait for the growth of purchase prices from the State Reserve. Meantime, China’s third-quarter pork output reached 12.11 million tonnes, official data showed on Monday. Still, third-quarter pork output was slightly higher than the 12.02 million tonnes produced during the same period a year ago. China’s pork output reached 41.5 million tonnes in the first nine months of the year. That is up 5.9% from the correspond- ing period a year ago. The total pig herd also grew to 443.94 million heads at the end of September, up from 430.57 million at the end of June, the data also showed. Meantime, since the middle of June, hog prices have rallied more than 60%, apparently pushing up consumer inflation, and prompting re- peated market intervention by authorities in Beijing. According to China’s powerful state planner, the rally in prices is a result of farmers holding back pigs from slaugh- ter as they wait for higher prices, while others seek to profit by raising pigs to heavier weights, although some analysts say the rapid rise in price is due to tighter sup- ply of hogs. In China, there is a significant in- crease in the volume of soybean processing, this is primarily due to the shortage of meal for the production of feed. Recently, there are even cases when feed manufacturers buy non- GMO soybean meal for their own needs. The increase in processing volumes has led to an increase in the supply of soybean oil on the market. For rapeseed oil last week there were zero indicators for processing. Last week, 0 tons of rapeseed were pro- cessed, two weeks ago the volume of processing was only 7,000 tons. The volume of production of rapeseed oil from imported raw materials by years. In the current sea- son, rapeseed processing volumes are much lower than the average values ​for the last 3 years. Since September, there has been a high demand for rape- seed oil, in recent weeks SPOT deliveries are especially rele- vant, domestic buyers are not ready to contract volumes with delivery later than January. The active period of rapeseed imports should start already in November, which will lead to an increase in processing volumes, and as a result, an increase in the supply of oil and meal on the market. But at the same time, low stocks of oil and strong demand will support prices. China is the fourth key to the market’s secret. Is there a fifth? MILLER / NOVEMBER 2022 105 MARKET ANALYSIS