Soybean: Soybean inventories have continued to decrease upon a 1.86-million-tonne crush and few arrivals. This week (as of Jan. 25th), imported soybean stockpiles total 5,402,400 tonnes in main domestic coastal oil mills, a reduction of 211,900 tonnes by 3.77% from 5,614,300 tonnes last week, yet up by 14.27% from 4,727,700 tonnes of the same period last year. Predictably, port soybean stocks will keep falling in the first quarter with few arrivals from January to March, under which soybean supply will get tight from March to the first half of April.
Fig. 1: China’s coastal soybean carry-over stocks in recent years
Soybean meal: Soybean meal has seen higher trading volume than last week for its busy market amid ongoing stockpiles for the festival, with near 400,000 tonnes clinched yesterday. The trading volume is 1,038,200 tonnes this week, above 828,700 tonnes last week. And its stock pressure has thus almost eased with quick deliveries among downstream buyers. As of Jan. 25th, soybean meal stock in main domestic coastal oil mills is 743,600 tonnes, down 99,900 tonnes by 11.84% from 843,500 tonnes last week, and down by 22.88% from 964,220 tonnes of the same period last year. Although operation rate will fall sharply over the Spring Festival holidays next week, soybean meal stock decline will be narrowed down by dramatic slowdown in delivery.
Fig. 2: China’s coastal soybean meal carry-over stocks in recent years
Outstanding contracts: Outstanding contracts of soybean meal in oil mills has experienced another drop this week for quick delivery before the festival and small trading volume in basis contracts. On the week as of Jan. 25th, contracts in domestic main areas hold 2,459,300 tonnes unfinished, down 581,900 tonnes by 19.13% from 3,041,200 tonnes last week and by 47.96% from 4,726,100 tonnes of the same period last year. Customers remain cautious in buying upon forward basis after suffering heavy losses from such contracts in 2018, coupled by negative sentiment for later market among downstream buyers.
Fig. 3: China’s coastal soybean meal in outstanding contracts in recent years
