Global soybean prices support China’s soybean meal market despite abundant domestic supplies

China’s soybean meal market has turned higher in July after several weeks of weakness, supported mainly by stronger U.S. soybean prices. USDA’s July WASDE report unexpectedly reduced both U.S. and global soybean ending stock estimates, reinforcing expectations of a tighter global supply balance and providing upward momentum to soybean prices.

Additional support has come from improving U.S. export prospects. Following renewed trade discussions between the United States and China, U.S. exporters have announced several large soybean sales to Chinese buyers for the 2026/27 marketing year. At the same time, hot weather across key U.S. soybean-growing regions continues to raise concerns about crop development, although USDA has maintained its yield forecast unchanged.

Despite the stronger global outlook, China’s domestic soybean market remains well supplied. The country is currently receiving peak soybean shipments from South America, while crushers continue operating at high utilization rates. As a result, soybean meal inventories are increasing, although stock accumulation has been slower than market participants had expected.

Resilient feed demand has helped prevent a faster build-up of inventories. Although China’s hog sector remains under financial pressure, herd numbers have not declined, and feed demand has risen by around 12% since the beginning of the year compared with the same period in 2025. Relatively attractive soybean meal prices have also increased its inclusion in feed formulations, while substitution with alternative protein meals remains limited.

Analysts expect weather conditions in the United States to remain the key driver of the market in the coming weeks. If hot and dry weather persists, global soybean prices could move higher. However, abundant soybean supplies in China are likely to continue weighing on the domestic soybean meal market through mid-August, limiting further gains in local prices despite firm support from global markets.

Tags: China, prices, soybean meal