Demand for soybean meal in China, the world's biggest consumer of the animal feed, may rise on expectations hog inventories will expand, the China National Grain & Oils Information Center said.
"The market is increasingly upbeat on the expectation of rising soybean meal consumption," the state-owned researcher said in a daily market report. At the end of March, breeding sows made up 11 percent of the country's total hog inventory, compared with the normal 9 percent, indicating higher capacity for reproduction, it said.
Soybeans in Chicago yesterday traded higher than $10 a bushel for the first time since January on rising purchases from China. China's measures to boost pork prices and a dispute over soybean oil imports have spurred more purchases of the oilseed, which is crushed to make meal and oil.
"Demand for soybean meal has a stable base" because it's not easy to alter the type of feed given to pigs, Chen Baomin, analyst at Jilin Grain Group Co., said by phone from Dalian. If expectations build for a price rise, feed mills buy more to boost inventories, Chen said.
Soybean meal on the Dalian Commodity Exchange gained 5 yuan to 2,890 yuan ($424) a metric ton at the 11:30 a.m. local time break. Soybean oil fell 2 yuan.
July-delivery soybeans traded in Chicago fell 0.2 percent to $10.045 a bushel. The contract yesterday reached $10.155, the highest level for a most-active contract since Jan. 11.
China's inbound soybean shipments may reach a record 5.5 million tons in May, up from about 4.3 million tons this month, the center said. Imports in June may also be 5 million tons before declining to 4 million by July, it said.
China for the second time this year began to stockpile pork on April 20 to boost hog prices, the Ministry of Commerce said. Prices of hogs during the week of April 12 on average rose 0.6 percent from week earlier to 9.85 yuan per jin (19.7 yuan per kilogram), it said.
"Pork prices will likely pick up more" after the government launched the stockpiling measures, Chen said.
Still, some areas reported further declines and the ministry will further boost prices to a "reasonable level," the ministry said.
China, which has banned imports of soybean oil from Argentina, has made the move to increase the country's crushing, Agricultural Secretary Lorenzo Basso said April 20.