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Need for vegetable oils driving Chinese purchases of US soybeans

A global ag trade expert says the need for vegetable oils is driving recent purchases of US soybeans by China.

Gregg Doud with Aimpoint Research tells Brownfield when you consider the high price of palm oil in Southeast Asia, drought in South America and the blockage of sunflower seed oil from Ukraine and Russia, there’s only one place left to turn.

“The only other place to get vegetable oil would be to buy US soybeans and ship them to China and crush them. Not for the meal for pigs like they usually do, but for the soybean oil. Which apparently is what’s driving recent purchases of US soybeans into China.”

Over the last 8 business days, the USDA has confirmed sales of around 2.5 million tons of US soybeans, mostly to China.  

“That is totally contra-seasonal. This is not the time of year that China usually buys US soybeans but I think it is driven by that need for oil, not meal.”

Doud says the US is often looked at as a residual supplier of grain on the global market and this is a prime example of US soybean stocks being put to use when other markets are not available.