China's soybean imports seen dropping for first time in 15 years

China's soybean imports may fall for the first time in 15 years next season as the government sells from stockpiles and domestic production climbs, according to Oil World. Inbound shipments by the biggest importer may drop as much as 4 percent to 80 million metric tons in the 12 months starting August, the Hamburg-based researcher said in a report. The government will reportedly sell about 4.3 million tons from stockpiles accumulated in the past few years, Oil World said.

Chinese inventories are still "very high" and crushers and importers have preferred using stockpiled beans in recent weeks, the researcher said. Prices have jumped this year, with U.S. futures climbing 22 percent and soybean meal, a byproduct used in animal feed, rallying 38 percent. Chinese farmers will probably boost output by more than a quarter next season, the researcher said.

"Plantings recovered noticeably by 15-20 percent, according to estimates of Chinese traders and crushers," Oil World said. "Forward buying for arrival in October to December 2016 has been subdued. This is likely to be reflected in year-on-year reductions in combined U.S. and South American soybean exports to China in coming weeks."

The government offered to sell about 300,000 tons of soybeans from stockpiles on July 15 and most of that may be used to crush into oil and meal products, Oil World said. The country's imports will drop "sizeably" from a year earlier in July, August and probably also September, it said.

Soybean futures have climbed partly as floods in Argentina cut output and U.S. exporters will have to offset some of those supply losses throughout the rest of this year, the researcher said. Next month will be the most sensitive growing period for U.S. crops and forecasts are indicating potential plant stress from hot and dry conditions toward the end of July, it said. "It remains to be seen to what extent Chinese importers and crushers will allow stocks of imported soybeans to decline and at what time they will start to increase purchases in view of the existing supply uncertainties in South America and U.S.," Oil World said.