According to Cofeed, the latest statistics of soybean oil stocks and amounts in outstanding contracts in Chinese major areas in week 27 (till July 6th, hereinafter referred to this week) are shown as follows:
Unit: 0’000 tonnes
|
Area/Enterprise
|
Soybean Oil Stocks
|
Soybean Oil in Outstanding Contracts
|
|
|
Week 27
|
Week 26
|
Variation
|
Week 27
|
Week 26
|
Variation
|
|
Northeast China
|
6.9
|
6.5
|
0.4
|
9.8
|
8.1
|
1.7
|
|
North China
|
29.92
|
28.43
|
1.49
|
26.06
|
25.26
|
0.8
|
|
Shandong
|
12.79
|
12.37
|
0.42
|
11.965
|
11.19
|
0.775
|
|
East China
|
49.18
|
49.25
|
-0.07
|
34.72
|
35.95
|
-1.23
|
|
Guangdong
|
13.77
|
12.85
|
0.92
|
26.3
|
26.3
|
0
|
|
Guangxi
|
13.19
|
12.57
|
0.62
|
14.15
|
13.35
|
0.8
|
|
Fujian
|
10.37
|
8.22
|
2.15
|
2.9
|
4.48
|
-1.58
|
|
Henan
|
3.45
|
3.38
|
0.07
|
0.78
|
0.84
|
-0.06
|
|
Sichuan
|
3.57
|
3.73
|
-0.16
|
3.85
|
4.13
|
-0.28
|
|
Others
|
12.86
|
12.87
|
-0.01
|
2.08
|
1.62
|
0.46
|
|
Total
|
156
|
150.17
|
5.83
|
132.605
|
131.22
|
1.385
|
Comments: soybean oil stocks continue to pile up this week, and according to Cofeed, soybean oil in China's business inventories ended July 6th totals 1,560,000 tonnes, up 58,300 tonnes by 3.88% vis-a-vis 1,501,700 tonnes on the week, up 215,300 tonnes by 16.01% from 1,344,700 tonnes on the month. Meantime vis-a-vis the same period a prior year, it is up 302,000 tonnes by 24.01% from 1,258,000 tonnes, and on the very note, average stocks of soybean oil in recent five years are now pegged at 1,206,450 tonnes. That considerable supply pressure on soybean oil in lots of mills contributes to a common urgency for delivery taking, whereas traders in midstream and downstream have little interest in buying.
Slow consumption of soybean meal resulting from sluggish pigs raising has put considerable pressure on meal-bloated mills, especially some mills in Shandong and Jiangsu, whilst pork consumption is also seen downsized as weather gets hot. To ease such pressure, mills lower down the operation rate either by operation limits or machine halt. Therefore national soybean crush this week come into at 1,824,500 tonnes (1,441,355 tonnes of soybean meal, 346,655 tonnes of soybean oil) , down 86,350 tonnes by 4.51% from 1,910,850 tonnes last week. Meantime, soybean processing rate (capacity utilization) also drops to 52.82%, 2.49 percentage points lower than 55.31% last week. Total soybean crush in week 28 next week, according to Cofeed, will probably be down to 1.76 Mln tonnes or so and 1.87 Mln tonnes in week 29 if operation rate further declines. Notably, weekly crush still keep a high level in spite of lowered operation rate-- more than 1.8 Mln tonnes, and soybean oil stockpiles later will further pile up given sluggish oils demand in end users.
Figure: Comparison of domestic soybean oil stocks in recent years
