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China Soybean Weekly Report -- As of September 13, 2019

I.Soybean

Price: The market is negative when the trades with a lot of inventory are selling goods amid the marketing of new soybeans; the optimistic outlook about US-China trade talks increase after Trump said US will move the increased Tariffs on 250 Billion Dollars worth of goods, from October 1st to October 15th; and the global supply is huge amid the bumper harvest in South America. However, the insufficient volume of China's distributed soybean inventory and the US soybean import restriction is supportive of the price, even though China’s Ministry of Finance announced plans to exempt 16 types of U.S. products from additional tariffs this week, which doesn't include soybean and other major agricultural products. The market is mixed and short-term prices likely maintain stable. Buyers should pay attention to news about the trade war and the domestic demand.





Crush: This week (Sept. 6th-13th), as the operation rate continues dropping for swelling meal inventory in South China, soybean crush totals 1,799,700 tonnes (meal 1,421,763 tonnes and oil 341,943 tonnes), a reduction of 13,450 tonnes by 0.74% from 1,813,150 tonnes last week. Meanwhile, the operation rate (capacity utilization) is 49.74%, down 0.76 percentage points from 50.50% last week. Soybean crush is expected to fall further next week and to rise again that following week, of which it will be at around 1.75 mln tonnes and 1.80 mln tonnes, respectively.

As of this week, soybean crush nationwide totals 81,053,365 tonnes in the crushing year of 2018/19 (from October, 2018), down 4,341,735 tonnes by 5.08% from 85,395,100 tonnes of the same period last year; in 2019 (from Jan. 1st, 2019), national soybean crush amounts to 57,901,965 tonnes, down 3,092,415 tonnes by 5.06% from 60,994,380 tonnes of the corresponding period in 2018, according to Cofeed. 
 


Inventory: Imported soybean inventory has decreased slightly this week with small amount unloaded and arriving at ports. On the week as of September 13th, imported soybean inventory is 5,337,100 tonnes in main domestic coastal oil mills, down 34,900 tonnes by 0.65% from 5,237,200 tonnes last week and down by 24.31% from 7,051,900 tonnes of the same period last year. Soybean supply is not a problem for the moment.




Import and its outlook: According to Cofeed, imported soybean is 24 cargoes with 1.559 mln tonnes this week, a total of 42 cargoes with 2.749 mln tonnes for September so far. The import is pegged at 134 cargoes with 8.618 mln tonnes in August, below the forecast of 9.105 mln tonnes because 9 cargoes are postponed to September. Meanwhile, the import is predicted to be 8.022 mln tonnes for September, 7.80 mln tonnes for October, 7.90 mln tonnes for November and 6.80 mln tonnes for December. Statistics will be updated every week on account of variable and unstable buying.  

II.Soybean Meal

Price: This week (Sept. 9-12, 2019), spot soybean meals further decline. As of this Thursday, the price is 2880-2970 yuan/tonne in coastal areas, down by 40-80 yuan/tonne from last week.





Inventory: Soybean meal inventory has decreased slightly this week as its trading has increased by 24.9% weekly to 834,700 tonnes as of this Thursday. The trading has turned better as downstream buyers make replenishment upon falling prices and ahead of the Mid-autumn Festival. On the week as of September 13th, the inventory totals 742,000 tonnes, down 47,800 tonnes by 6.05% from 789,800 tonnes last week and down by 20.88% from 937,900 tonnes of the corresponding period last year. Although soybean crush is predicted to fall to 1.75 mln tonne next week, soybean meal inventory may just change a little amid slower demand after the festival.




III.Soybean Oil

Price: This week (Sept. 9-12, 2019), soybean oil mostly declines again. As of this Thursday, main prices for GB grade-one soybean oil in coastal areas stay at 5990-6190 yuan/tonne, mostly down 10-40 yuan/tonne.





Inventory: With the decline in operation rate, soybean oil inventory also continues to fall. On the week as of September 13th, the inventory has totaled 1,330,660 tonnes, down 1,160 tonnes by 0.09% from 1,331,820 tonnes last week, down 34,340 tonnes by 2.52% from 1,365,000 tonnes last month, and down 256,840 tonnes by 16.18% from 1,587,500 tonnes of the corresponding period last year. And the five-year average at the same period is 1,291,800 tonnes.