Estimated Chinese crush margins in the cash market have ranged from mildly profitable to deep in the red over the last several months, depending on location and basis relationships while futures based crush spreads between Chicago and Dalian have held well over last year since October. Despite the less favorable cash estimates, Chinese soy processor continue to crush soybeans at a record setting pace. Chinese soybean crush last week was estimated at 1.88 MMTs, the largest since late February and the 2nd largest weekly crush total since the New Year holiday in late January. The cumulative crush total for this year is record large and up 8% year over year, but on track to reach the latest USDA forecast that calls for a 6% increase in the annual soybean crush to 86.5 MMTs.
The preliminary trade data from Chinese Customs was released on Monday and showed all origin soybean imports totaled just over 8 MMTs in the month of April, up from 6 MMTs in March and 7 MMTs a year ago. April imports were also record large for the month, but once again fell short of expectations derived from monthly shipment data from major exporting countries. Cumulative Oct-Apr imports total 50 MMTs, 9% over last year and also record large. Based on trade flows from both North and South America during the month of April, we estimate that May imports could are also likely to reach a new record, and could surpass 9 MMTs. Brazil shipped 7.3 MMTs in March, and the US sent 1.5 MMTs, while shipments in April were at 6.8 MMTs for Brazil and just over 1 MMTs from the US.
In the April WASDE, the USDA raised their long held estimate for Chinese soybean imports to 88 MMTs, with annual crush forecast at 86.5 MMTs. While the current crush pace still does not offer a strong reason to increase estimates for annual crush, the pace of imports continues to suggest that the USDA forecast could still be a couple million tons too low. Assuming our estimate for April imports, the cumulative total would be just over 59 MMTs, or 11% over last year, versus the USDA forecast that calls for a 6% annual increase. Based on the recent pace of exports to China, we think that the USDA could again increase their forecast by 1-2 MMTs in May WASDE, as the current forecast implies Jun-Sep imports falling to a 3 year low. A number of private estimates have already moved to 90+ MMTs.