Chinese officials have released their 2024 import data. For the year, China imported 105 million mt of soybeans, a 6.5% increase from 2023. Brazil was the supplier of 74.6 mmt, 71% of China’s needs. The US market share was 21% at 22.1 mmt. In 2023 the US accounted for 24% of China’s import needs. 

China’s corn imports for 2024 totaled 13.64 mmt, a year to year decline of 50%. Record domestic production and more efficient corn usage reduced the country’s import needs. Cheaper corn out of the Black Sea also competed with US sales. Of these Chinese corn imports 47% came from Brazil. The US supplied just 15% of China’s corn needs in 2024, down from the 26% share in 2023. The US has seen its share of China’s corn needs drop steadily in recent years. In 2022 the US had a 72% market share and in 2021 it was 70%. 

We are seeing mixed opinions on South American weather and crop conditions. While rains have slowed the Brazilian soybean harvest, they have not had a major impact on yield. In fact, some firms continue to raise their soybean crop estimates. The crusher Abiove put Brazil’s soybean crop at 171.7 million metric tons, an increase of 3 mmt from their last estimate. This estimate is 3 mmt to 5 mmt above most others, including the USDA. Abiove also has Brazil soybean exports at 106 mmt and crush at 57.1 mmt, both above most other projections, including from CONAB. 

In Argentina, crop conditions are less promising. Ratings of both corn and soybean crops continue to decline and are now below last year. Argentina officials also report the country’s soil moisture is now 64% adequate, down 13% from the start of January. This is well below the 92% adequate from the 2023/24 growing season. 

The Chinese Commerce Minister has announced it will be launching an investigation into recent beef imports but was rather vague in its exact reason why. China has increased its beef imports considerably in recent years, going from $8.2 billion in 2019 to $14.2 billion for 2023, making it the world’s largest beef importer. The Chinese consumer has shifted their diet to include more beef, but as with nearly all other commodities, this led to China over-booking its needs. This now has China reporting an oversupply of beef reserves. 

Speculation is this move by China is being done to limit its beef intake and support its domestic market, same as with other commodities. China’s overbuying of beef has driven its domestic cattle market to 10-year lows. The beef exporter this will likely impact the most is Brazil who provides China with 42% of its beef needs. This is followed closely by Argentina and Australia. The US is the 4th largest beef supplier with a 10% market share. US beef is in high demand in China due to its quality, and this will likely limit any loss of export business. 

Even if the US would lose some export trade with China, it would make the US red meat balance sheets simply less bullish rather than turning them negative. The US beef supply at the end of November was 440.54 million pounds, the lowest volume in ten years. The frozen pork supply was 391.07 million pounds, the tightest pork supply for November since 1997. Pork belly inventory increased 39% to 22.5 million pounds, which was still 53% less than a year ago. Total red meat supplies were down 3% from the end of October, and down 5% from last year. 

Chinese officials have reported their end of November sow herd totaled 40.8 million head. This was a 1.9% drop from November 2023 but remains above the number of sows the country has targeted as a satisfactory level. The country also reported a year to date hog slaughter of 296.1 million head, a 2.6% decline from the same period in 2023. This is not that surprising as the country sees less contraction from African Swine Fever culling. The concern in China’s hog market is that pork demand has dropped faster than production has slowed, and the country is still facing a burdensome pork supply. 

The Russian government is reporting major production losses to its wheat crop from recent weather. Analysts in Russia claim this year’s wheat production will fall 13% from last year and total roughly 82 million metric tons. Russian wheat exports are also forecast to fall to 41 mmt this coming year, with total grain exports at 52 mmt. While Russia will remain the world’s leading wheat exporter at this level, it will reduce their global market share from 25% to 20%, opening the door for more US export trade. 

While recent labor data has been negative for the labor force, it is positive for the US economy.  Continuing jobless claims now stand at 1.91 million, up from what we have seen in the past several weeks. What is most interesting is the length of time for being unemployed is growing. This tells us that while unemployment in the US remains historically low, there are fewer job opening to pick from, or people are simply not being hired. This bearish jobs data is actually supportive of future interest rate cuts from the Federal Reserve as it shows the US economy is slowing. 

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