Jan. 16 (Bloomberg) -- Crushers in China, the world’s biggest buyer of soybeans, boosted purchases last week as rising demand for livestock feed increased profits from processing, according to a Bloomberg survey.
Companies ordered 30 cargoes from the U.S. or South America, the equivalent of about 1.8 million metric tons, according to the median of estimates from five crushers and one researcher compiled by Bloomberg. That compares with a usual weekly average of 10 cargoes to 20 cargoes, respondents said.
China canceled 1.16 million tons of shipments since Dec. 18, according to the U.S. Department of Agriculture, which increased concern consumption may be slowing. Fresh purchases by China, which buys more than 60 percent of globally traded beans, suggest demand is recovering as U.S. supplies decline.
“Traders are securing more shipments for the next two months” because of the looming shortage in supplies and limited loading capacity in South America, said Monica Tu, analyst at Shanghai JC Intelligence Co., who took part in the survey.
Consumption of soybean meal in China is increasing as farmers fatten hogs before the Lunar New Year festival in February when pork demand rises, Tu said from Shanghai yesterday. Stockpiles of soybeans in the U.S, the biggest producer last year, were 1.966 billion bushels on Dec. 1, 17 percent less than a year earlier, according to the USDA.
Crush margins are improving as lower-priced shipments bought in December arrived, said Tu. Crushers can lock in profits of about 200 yuan ($32) on each ton of soybeans they process in the next two months, she said.
The cancellations reported by the USDA may have been done to influence the market or shift the origin of supply to South America, Tu said, citing her conversations with traders. “China’s soybean demand remains good,” she said.
China imported 5.89 million tons of soybeans in December, the most since June 2010, according to customs data compiled by Bloomberg. Imports in the year through Sept. 30 may gain 6.4 percent to 63 million tons, the USDA forecast Jan. 11.
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