Comments: soybean oil extends falls in stocks this week, and according to Cofeed, soybean oil in China's business inventories till February 23rd has been shriveled from 1,460,000 tonnes on Feb. 9th to 1,415,850 tonnes by 3.02% on the week and 44,150 tonnes below by comparison. Additionally, the figure is down 6.85% from 1,520,000 tonnes the same week last month with a reduction of 104,150 tonnes and down 27.61% or 306,350 tonnes below as compared to 1,109,500 tonnes the corresponding period of last year with average stocks of soybean oil in recent five years around 997,300 tonnes. Actually, there are two reasons accounting for the declining stocks: 

 

    First, operating rate in domestic oil mills reaches a nadir for Chinese holidays, as a consequence, national soybean crush in week 8 totals around 251,300 tonnes (199,783.5 tonnes of soybean meal, 45,234 tonnes of soybean oil), down 58.90% or 360,150 tonnes lower as compared to 61,1450 tonnes attained in week 7 (Feb. 10th- 16th) and down 86.99% from 1,931,800 tonnes in week 6 (Feb. 3rd- 9th), with a reduction of 1,680,500 tonnes. soybean crush capacity utilization in week 8 is dented to 7.36%, 10.55 percentage points lower than 17.91% in week 7 and 49.2 percentage points lower than 56.56% in week 6.

 

    Second, quite a lot middle channels are out of stock factored in the machine halt in oil mills during Chinese holidays, yet continuous rises of oil futures after the holidays boost market confidence and attract dealers to make replenishment, which then contributes to the decreasing soybean oil stocks this week. 

 

    The latest estimates for soybean arrivals in March are about 6.7 Mln tonnes, but soon the amounts may be probably increased, with 8.8 Mln tonnes in April and 9 Mln tonnes in May. Generally speaking, operating rate will be exceedingly high in the near future with sufficient soybean supplies, then stocks may pile up further.