Soybean: Soybean stock is slashed this week by small arrival amount of soybean at port under an overall low import volume in October. Until Week 41 (as Oct 12th), imported soybean stock in domestic coastal area amounts to 7,032,900 tonnes, a decline of 321,100 tonnes by 4.37% from 7,354,000 tonnes last week, yet a large increase by 51.97% compared to 4,627,800 tonnes of the corresponding period last year. Subject to the trade war, imported soybean will drop in the fourth quarter, in which soybean stock will be dragging down and will enter liquidation of inventories. Moreover, if trade conflicts keep escalating, soybean supply will get relatively tight from December to February 2019. 

      Soybean meal: There is growing concerns over the trade war as relations between the US and China has got worsening during the National Day. Therefore, meal futures on DCE closed higher last week, followed by domestic soybean meal spots. As soon as market opened after the holiday, feed companies raised a wave for replenishment and buyers were active in buying on the dips. Under such smooth dealings (The total trade of soybean meal this week is 1,033,600 tonnes, of which spots make up 812,100 tonnes.), soybean meal stock declines again this week. Until this week (as of Oct 12th), soybean meal stock in main domestic coastal refineries totals 893,100 tonnes, down 43,600 tonnes by 4.65% from 936,700 tonnes last week, yet up by 14.06% from 783,100 tonnes during the same period last year. The crush volume will still moves to a high level of 1.9 Mln tonnes next week, and oil mills may will slow down their speed in purchasing soybean meal after replenishment last week; hence, soybean meal stock is predicted to go up slightly this week.

      This week, outstanding contracts of soybean meal in oil mills reduce slightly. As of October 12th, contracts in main domestic coastal oil mills hold 5,684,600 tonnes unfinished, down 87,300 tonnes by 1.51% from 5,771,900 tonnes last week, yet up by 18.95% from 4,778,800 tonnes of the corresponding period last year.

      Fig. 1: China’s coastal soybean carry-over stocks in recent years

      Fig. 2: China’s coastal soybean meal carry-over stocks in recent years

      Fig. 3: China’s coastal soybean meal in outstanding contracts in recent years