Comment: stockpiles of soybeans this week further pile up owing to fairly large port arrivals and falling soybean processing. In week 27 ended on July 6th, stocks of imported soybeans in China’s major coastal areas amount to 6,794,000 tonnes, up 498,500 tonnes by 7.91% on the week vis-a-vis 6,295,600 tonnes last week, and up 16.37% contrasting with 5,837,800 tonnes year on year. In general, stockpiles will keep growing onwards given soybean crush next week is to be dragged down by bloated meals.

    Despite growing stockpiles of soybean meal, slow meal demand in end users, little buying interest and machine halt in some Shandong and Jiangsu meal-bloated mills all put considerable pressure on soybean meal. Till July 6th, total stocks in costal major areas come into at 1,272,100 tonnes, up 3,300 tonnes by 2.66% from 1,239,100 tonnes last week, and as compared to 1,074,300 tonnes year on year, it is up 18.41%. Generally speaking, stockpiles of soybean meal later may be eased to 1.76 Mln tonnes or so with lowered operation rate.

    Buyers now shift to a bullish stance towards after market amid intensifying trade tensions, whilst they are deadly concerned about short supply of soybean meal in the months ahead. On this point, buyers engage themselves in basis contracts upon bargain hunting, therefore turnover upon basis contracts goes better and soybean meal to fulfill in contracts this week rise sharply. Till July 6th, soybean meal amounts in outstanding contracts rise to 6,481,200 tonnes from 5,197,700 tonnes last week, up 1,283,500 tonnes by 24.69%, and up 19.04% vis-a-vis 5,444,500 tonnes year on year. 

                   Figure 1: Trend of Chinese coastal soybean carry-over stocks in recent years

              Figure 2: Trend of Chinese coastal soybean meal carry-over stocks in recent years

          Figure 3: Trend of Chinese coastal soybean meal in outstanding contracts in recent years