China’s Shortage of Pig Feed Set to Ease on Looming Soy Imports

Pigs stand in a holding pen at a wholesale market in Nanning, Guangxi Zhuang autonomous region on Monday, Sept. 16, 2019. Photo: Bloomberg

(Bloomberg) — China is reeling from a nearby shortage of soybean meal, an important ingredient in hog feed, which is shown by a hefty backwardation in the futures market on the Dalian Commodity Exchange.

Futures for November delivery settled at 4,839 yuan ($670) a ton Wednesday, almost 800 yuan higher than prices for January. Chinese processors slowed buying of foreign soybeans during the summer when crush margins turned negative, curbing arrivals. Shallow water in the Mississippi River because of drought has also limited prospects for U.S. exports and worsened the crunch.