In China, an excess of soybeans leads to a decrease in demand and imports, posing a threat to the global market.

An excess of soybeans can lead to a reduction in China's imports of this product from the U.S. from September to December, when the peak season for American soybean exports occurs, reports Agricultural.

China has faced an excess of soybeans due to record purchases which have led to an increase in stocks at a time when demand for animal feed remains low, and prices for products such as soybean oil and soybean meal are expected to continue falling, according to analysts' forecasts. The benchmark soybean meal DSMcv1 from Dalian lost nearly 8% over three weeks, while soybean oil DBYcv1 fell by approximately 4% last week.

"The main issue is that the demand for soy products is not growing," said a Singapore trader from a large international company that operates oilseed processing plants in China. "Processing margins are shrinking due to large bean supplies."

Soybeans are crushed to produce soybean meal, a protein ingredient used to feed the world's largest pig herd in China, as well as to produce soybean oil, which is mainly used for cooking. However, the slowdown in economic growth in China, which consumes nearly half of the world's pork products, is reducing demand for both meat and feed products.

According to traders' reports, soybean imports to China in July, mainly from Brazil, are expected to reach a record high due to low prices and the possibility of Donald Trump returning to the U.S. presidency, as well as renewed trade tensions.

The processing margin, which has been in the negative zone since early June, further decreased this month. Oilseed processors in the Zichao hub lost over 600 yuan per ton, marking the most significant drop since February.

According to Reuters, since February, the state soybean supplier Sinograin has put up for auction about 9.68 million tons of imported soybeans, but processors have only purchased 2.08 million tons, which is 21% of the total volume.

According to Darin Friedrichs, co-founder of Shanghai-based company Sitonia Consulting, last year about 27% of soybeans auctioned were sold, with higher participation rates.

"It's becoming very difficult to be optimistic because prices for almost all proteins are decreasing, demand is weakening. Consumers really don't want to spend money," he added.

In the latest report from China's Ministry of Agriculture, soybean consumption is forecasted to decrease to 114.56 million tons in 2024/25 compared to an estimated 115.24 million tons in the 2023/24 marketing year ending in September. Brazil has currently taken the lead in soybean supplies to China, surpassing the U.S., and accounting for 70% of the total import volume.

Soybean imports from Brazil to China increased by 2.2% in June compared to the same period the previous year. According to the General Administration of Customs, the world's largest soy buyer imported 9.72 million tons of oilseeds from Brazil last month compared to 9.51 million tons a year earlier.