Price: The imported soybeans in Tianjin port are not a lot.  Moreover, the 12th round of trade talks ended this week in Shanghai, and U.S. President Donald Trump said the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1, and the tariffs may increase to over 25% if the trade talks stay in deadlock, according to Bloomberg. The re-escalation of U.S.-China trade conflicts is supportive of China's soybean market. However, the China's market is curb when China's Customs announce that soybean imports from Russia are all permitted, and it's reported that some Russian soybean has been imported in July through ocean shipment; the traders' delivery pace is slow during the off-season period; the soybean supply globally is huge. The market is mixed and short-term prices likely maintain stable. Buyers should pay attention to news about the trade war.

Crush: This week, the operation rate has dropped again due to continued pressure from soybean meal inventory and some emergency shutdowns for typhoon Wipha. Soybean crush totals 1,492,600 tonnes (meal 1,179,154 tonnes and oil 283,594 tonnes), a reduction of 75,000 tonnes by 4.78% from 1,567,600 tonnes last week. Meanwhile, the operation rate (capacity utilization) is 41.78%, down 2.1 percentage points from 43.88% last week. Amid the pickup in operation rate, soybean crush is predicted to return to around 1.60 mln tonnes next week and to around 1.80 mln tonnes the following week. 

As of this week, soybean crush nationwide totals 70,599,315 tonnes in the crushing year of 2018/19 (from October, 2018), down 3,804,333 tonnes by 5.11% from 74,403,648 tonnes of the same period last year. In 2019 (from Jan. 1st, 2019), national soybean crush amounts to 47,447,915 tonnes, down 2,555,013 tonnes by 5.1% from 50,002,928 tonnes of the corresponding period in 2018. 

 

Inventory: The inventory continues to increase this week as its crush falls again to 1.49 mln tonnes due to the swollen meal inventory and the emergency shut down under the typhoon Wipha in Guangdong. On the week as of August 2nd, imported soybean inventory is 5,544,500 tonnes in main domestic coastal oil mills, up 644,100 tonnes by 13.14% from 4,900,400 tonnes last week yet down by 16.75% from 6,660,300 tonnes of the same period last year. As soybean import estimate is pegged at a high level of around 28 mln tonnes in the third quarter, its inventory is likely to increase further later.

Import and its outlook: According to Cofeed, imported soybean is 24 cargoes with 1.519 mln tonnes this week, a total of 8 cargoes with 518,000 tonnes for August so far. The import is predicted to be 9.1 mln tonnes for August, 9.0 mln tonnes for September, 8.4 mln tonnes for October, and 7.50 mln tonnes for November. Statistics will be updated every week on account of variable and unstable buying.  

Price: This week (Jul 29-Aug 2, 2019), soybean oil rises for four consecutive weeks. As of this Friday, main prices for GB grade-one soybean oil in coastal areas stay at 5430-5590 yuan/tonne, up 30-120 yuan/tonne.

Inventory: The inventory climbs higher this week, which can be mainly contributed to slower deliveries in South China due to the typhoon. On the week as of August 2nd, soybean meal stockpiles in main domestic coastal oil mills total 842,200 tonnes, up 15,600 tonnes by 1.89% from 826,600 tonnes last week yet down by 30.76% from 1,216,500 tonnes of the corresponding period last year. As the crush will return to around 1.60 mln tonnes and 1.80 mln tonnes in the coming two weeks, soybean meal inventory is predicted to increase fractionally.

Price: This week (Jul 29-Aug 2, 2019), spot soybean meal prices rebound with fluctuations. As of this Friday, the price is 2760-2820 yuan/tonne in coastal areas, up by 10-60 yuan/tonne from last week.

Inventory: Due to the decline in operation rate and quickened deliveries with the start of the stockpiling for packing oil, soybean oil inventory has dropped at a great pace this week. On the week as of August 2nd, the inventory has totaled 1,388,200 tonnes, down 51,300 tonnes by 3.56% from 1,439,500 tonnes last week, down 91,800 tonnes by 6.2% from 1,480,000 tonnes last month, and down 209,300 tonnes by 13.1% from 1,597,500 tonnes of the corresponding period last year. And the five-year average at the same period is 1,319,960 tonnes.