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How Large Was The Soybean Crop In China?
That might look an easy question to answer. The country's own CNGOIC think tank and the International Grains Council have pegged the crop at 12.8m tonnes, and the US Department of Agriculture at 12.6m tonnes.
But that's only half the story. As so often with Chinese data, what is printed in black and white is being assessed for shades of grey.  There is talk of a crop of 10m tonnes or less.  And, with China the biggest soybean importer and consumer, to keep its huge hog herd fed, that could matter to markets, stoking further demand for the oilseed at a time when supplies have been restricted by drought-hit North and South American harvests.  "This could result in China needing up to 65m tonnes of imports," compared with the 61.0m tonnes in 2012-13 that the USDA has forecast, Brian Henry at Benson Quinn Commodities said.
'Significant drop in planted area'
It would be easy to discount the talk of a sub-10m-tonne crop if it was being promoted just by a handful of US brokers which Mr Henry noted had been for much of the year "very bullish about soybeans.  "They are the ones who have been talking sky high soybean prices."  But there are other sources too.  A report from the US Department of Agriculture bureau in Beijing overnight flagged estimates of "between 10m and 12.5m tonnes", noting a "significant drop in planted area in Heilongjiang", the major growing province in China's north east.
"Disappointing soybean profits in 2011-12 influenced many north eastern farmers to substitute more profitable corn and rice crops in 2012-13," the bureau said.  And a report earlier in the week from the official Xinhua agency, flags a Chinese farm ministry estimate of production falling to 9.8m tonnes, as thanks to drought which cut the yield to 1.69 tonnes per hectare, from some 1.9 tonnes per hectare last year.
But no rally…
"Such news would typically be very supportive for prices," Luke Mathews at Commonwealth Bank of Australia said, terming a small rise in soybeans in the last session "relatively disappointing" given the farm ministry comments.  Why prices did not jump may be down in part to ideas that the country is already sitting on plenty of supplies, having booked more than 11m tonnes from the US already for 2012-13, on top of volumes already shipped.  "If they have enough to rely on their reserves until the South American crop comes off, that reduces the pressure on them to buy more for now," Mr Henry told
Furthermore, there are still the doubts about China's data to overcome, which have a reputation for inaccuracy borne of a subsidy system which rewards provinces by production.  "You never known to what to make of the data," Michael Cordonnier, at Soybean and Corn Advisor, said, noting that, despite the talk of poor Chinese growing conditions this summer, "their corn crop did real good".
Food vs feed
A more reliable gauge of the real state of Chinese soybean production may in fact be gained from the food market, rather than feed one.  China's own soybeans are grown largely for human consumption – the country, rather than Japan, is credited with inventing tofu – with the imports being turned into meal for pigs.  "If you begin to see approvals for Chinese imports of beans for food, then there is some validity in these lower estimates," Jerry Gidel, chief feed grains analyst at broker Rice Dairy, said.