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China's soybean crushers make biggest loss in 18 months on oversupply

* Shandong soybean crushing margins:

SINGAPORE, Dec 12 (Reuters) - Soybean crush margins in China dropped further this week and processors are now suffering their biggest losses in 18 months on dismal domestic demand for animal feed and higher supplies.

Crushers in the country's eastern province of Shandong, the hub for soybean processing, are making a loss of 336 yuan ($48.79) a tonne <JCI-SBMG-SHDNI> as compared with a negative margin of 68 yuan last week, according to Refinitiv data. That is the lowest since June 2017.

Processors were making a profit of 60 yuan at the end of last month, the data showed.

"Chinese feed millers have overbought meal expecting supplies to tighten in the fourth quarter due the trade war with the United States," said one Singapore-based senior executive at an international agricultural trading company.

"But no one realised meal prices are going to going to fall because of destocking and weak demand due to the swine fever."

African swine fever, deadly to pigs but not harmful to people, has spread rapidly through China causing the culling of herds.

Processing margins soared to 315 yuan a tonne in September, the highest since December 2016, as buyers snapped up supplies of soymeal on fears of shortages amid the Washington-Beijing trade war. Trade tensions have curbed U.S. soybean exports to China, the world's biggest buyer.

The country's soybean imports are set to drop in the months ahead because of the swine fever.

($1 = 6.8865 Chinese yuan)

(Reporting by Naveen Thukral; Editing by Christian Schmollinger)

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