Soybean meal sees big increase on Chinese demandLONDON — Soybean meal, an ingredient used in feed for pigs and cattle, has outperformed commodities globally this year on record demand from China.
By: WHITNEY MCFERRON, Bloomberg News
LONDON — Soybean meal, an ingredient used in feed for pigs and cattle, has outperformed commodities globally this year on record demand from China.
Soybean meal futures have surged 42 percent in 2012 on the Chicago Board of Trade, the best performer out of 80 commodities tracked by Bloomberg from New York to Tokyo, ranging from jet fuel to gold. China, holding the world’s biggest hog herd, will have a sixth consecutive year of record soybean meal consumption in the 2012-13 season that starts Oct. 1, the U.S. Department of Agriculture estimates. China is the world’s biggest consumer of soybean meal, raw soybeans and pork.
“Meal is a needed part of the feed supply, and demand from China’s hog herd has been huge,” said Nick Higgins, an analyst in London at Rabobank International, which picked soybean meal as this year’s top agricultural commodity in a report last December. “That’s led soybean meal to be the best performer in the complex year to date.”
China may consume a record 49.86 million metric tons of soybean meal in 2012-13, 7.3 percent more than in the current crop year, according to the USDA. The country may have a record 690 million hogs, almost six times larger than the U.S. herd.
U.S. processors produced 3.32 million tons of meal in May, up 14 percent from the same month a year earlier, while exports rose to the highest since January 2011, according to the most recent data from the National Oilseed Processors Association in Washington. Since Oct. 1, China has imported 9,700 tons of U.S. soybean meal, compared with none during the same time period a year earlier.
Declining global supplies have bolstered the price of soybeans and soybean products, after drought in the past season slashed output in Brazil and Argentina, the world’s biggest growers and exporters after the U.S. World soybean inventories may drop to 53.36 million tons at the end of this crop year, 24 percent lower than a year earlier, according to the USDA.