Soybean and Soybean Meal Stocks and Amounts in Contracts Weekly (Week 50, 2018)

2018-12-18 www.cofeed.com

Soybean: Soybean stock has increased slightly this week as operation rate has dropped for four consecutive weeks due to soybean shortages and swelling inventories in some mills. This week (as of Dec. 14th), imported soybean stock in domestic coastal areas totals 5,733,700 tonnes, up 23,000 tonnes by 0.40% from 5,710,700 tonnes and up by 34.96% from 4,248,200 tonnes of the same period last year. Chinese buyers will be less possible to return to US soybean under relatively large crush losses, unless the additional tariff on soybean imports is lifted. In the meantime, soybean will be in short supply in December and January from South America. Therefore, port soybean stock is predicted to continue its decline later.

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

Soybean meal: Soybean meal stock has increased fractionally this week amid small trading volume, for buyers remain cautious amid weak end demand, in addition to the resumption of US soybean imports. But the stock increment is limited as soybean crush volume has dropped for a fourth-consecutive week in oil mills. This week (as of Dec. 14th), soybean meal stock in main domestic coastal oil mills totals 943,400 tonnes, up 6,000 tonnes by 0.64% from 937,400 tonnes last week, and up by 22.36% from 771,000 tonnes of the same period last year. The crush volume will probably go up next week but will be at a low level of 1.70 Mln tonnes, whilst downstream buyers are still cautious; therefore, soybean meal stock will see little change next week.

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

Outstanding contracts: Outstanding contracts of soybean meal in oil mills post a reduction this week. As of Dec. 14th, contracts in domestic main areas hold 3,782,600 tonnes unfinished, down 84,800 tonnes by 2.19% from 3,867,400 tonnes last week, and down substantially by 38.87% from 6,187,980 tonnes of the same period last year.

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

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