While the CBOT Ag Trade has been intently focused on world soybean production and trade over the last 6-8 months, world soymeal demand has continued to expand. The chart reflects the USDA’s December estimates that called for total world soymeal demand to increase by nearly 10 MMTs in 2018/19. Chinese meal consumption is expected to rise by 2.2 MMTs (3%) this year, while the rest of the world consumption is seen increasing by 7.8 MMTs (5%). If correct, this will be the 10th consecutive year that world meal demand has increased!
At this time, there is enough import and crush data available from China to justify lowering estimates for China. Feed demand appears reduced amid the African Swine Fever outbreak. But all indications from world trade look to be supporting the USDA’s forecast for higher meal consumption for other non-Chinese consumers.
Argentine meal exports have been slow all season due to last year’s drought-reduced crop. However, meal production and export totals have recently improved as US soybeans have been imported and crushed. Oct-Dec meal exports of 5.8 MMTs were down 5% from last year and the slowest quarterly figure in 4 years.
Brazil was able to capture some of the lost Argentine export business, and quarterly exports of 3.8 MMTs were up 27% year over year – record large.
Official US export data for November has been withheld, as has weekly data for the last half of December, due to gov’t shutdown. However, there was enough weekly export data released to estimate Nov and Dec exports. We estimate a quarterly US export total of 3.4 MMTs, which if confirmed would also be a record.
We estimate combined US/BR/AR quarterly meal exports were up 37% year over year, at a record 4.6 MMTs. Note that this would be the 2nd consecutive year that the US was able to capture a larger share of the combined world meal trade.
The USDA has long held a forecast for increased world soymeal trade, which up until recently seemed somewhat optimistic. The December WASDE report estimated total world soymeal imports at a record large 62.5 MMTs – up 4% from last year. But with a full quarter of export data available from the principle soybean meal exporting countries, the USDA’s long-held 62+ MMT trade figure appears to be reasonable.
The US, Brazil, and Argentina, collectively account for 85-86% of total world soymeal trade. The chart plots the relationship between 1st quarter exports and annual world imports. USDA forecasts call for an increase in soymeal demand in every region of the world in the year ahead. The largest increase of 1.4 MMTs is forecast for South Asia, followed by a 1.3 MMT increase in N America. EU meal consumption is seen growing by 1.3 MMTs.
US/world soy markets remain focused on the US/China trade. But world feed demand (outside of China) is expanding which will support global soy crush rates.