Price: The market for imported soybeans is affected by huge supplies of Chinese soybeans and subdued demand at home. President Donald Trump said a new location for signing the “phase one” U.S.-China trade deal will be announced soon. With ongoing trade talks and positive prospect in bilateral relationship, China is likely to increase soybean imports from the US. Due to increasing supplies, imported soybean prices are predicted to steady with a weakening trend in the near term. 

Crush: This week (Oct. 26th-Nov. 1), soybean crush declines at a higher-than-expected pace due to supply shortages, and as some mills have to limit or suspend production due to environmental protection in Qingdao and Rizhao, Shandong. Soybean crush at domestic mills totals 1,554,450 tonnes (meal 1,228,015 tonnes and oil 295,345 tonnes), down 195,500 tonnes, or 11.1%, from 1,749,950 tonnes in the previous week. Meanwhile, the operation rate (capacity utilization) is 42.88%, down 5.39 percentage points from 48.27% in the previous week. Soybean crush is predicted to increase slightly to around 1.66 mln tonnes next week and to 1.80 mln tonnes that following week. Some soybean imports now are for state reserves, instead of for mills, so some mills may have to halt production due to a lack of soybeans early November. 

As of this week, soybean crush nationwide totals 6,987,000 tonnes in the crushing year of 2019/20 (from October 1st, 2019), down 1,853,385 tonnes, or 20.96%, from 8,840,385 tonnes of the same period last year. In 2019 (from Jan. 1st, 2019), national soybean crush amounts to 69,028,415 tonnes, down 5,241,765 tonnes, or 7.05%, from 74,270,180 tonnes of the corresponding period in 2018. 

 

Inventory: Soybean stocks continue declining this week with few shipments of imported soybeans discharged from the ports to mills. In the week as of November 1st, imported soybean stocks total 2,964,900 tonnes in main domestic coastal oil mills, down 354,100 tonnes by 10.67% from 3,319,000 tonnes last week and down by 54.55% from 6,524,100 tonnes of the same period last year. Soybean crush will return higher to 1.66 mln tonnes and 1.80 mln tonnes in the next two weeks, so the stocks will likely drop accordingly.

Import and its outlook: According to Cofeed, imported soybean is 22 cargoes with 1.415 mln tonnes this week, a total of 3 cargoes with 191,000 tonnes for November so far. The import is predicted to be 8.1085 mln tonnes for November and 8.50 mln tonnes for December, and 7.0 mln tonnes 3.90 mln tonnes respectively for January and February, 2020. Statistics will be updated every week on account of variable and unstable buying.  

Price: This week (Oct. 28-Nov. 1), domestic soybean meal prices decline overall. As of this Friday, the price settles down 40-100 yuan/tonne at 3,020-3,170 yuan/tonne in domestic coastal regions. 

Inventory: Soybean meal continues trading quite well this week as of November 1st, a total of 2,710,100 tonnes (spot contracts 281,500 tonnes and forward contracts 2,428,600 tonnes), a weekly increase of 10.44% from 2,453,960 mln tonnes in the previous week and a year-on-year increase of 727.51% from 327,500 tonnes. In addition, soybean crush also declines this week. Therefore, soybean meal stocks continue falling. In the week as of November 1st, the inventory totals 481,200 tonnes, down 75,300 tonnes by 13.53% from 556,500 tonnes last week and down by 50.33% from 968,900 tonnes of the corresponding period last year. The inventory is predicted to increase with higher crush next week, but the total tight supply will ease only after late November. 

Price: This week (Oct. 28-Nov. 1), domestic soybean oil prices rise for a fourth consecutive week. As of this Friday, the price for GB Grade I settles up 150-220 yuan/tonne at 6,520-6,580 yuan/tonne in domestic coastal regions. 

Inventory: Soybean oil stocks decline significantly this week due to lower soybean crush with strong trading after the National Day holiday. In the week as of Nov. 1st, China’s commercial inventory has totaled 1,256,550 tonnes, down 57,900 tonnes by 4.4% from 1,314,450 tonnes last week, down 93,250 tonnes by 6.91% from 1,349,800 tonnes last month, and down 593,450 tonnes by 32.08% from 1,850,000 tonnes of the corresponding period last year. And the five-year average at the same period is 1,365,200 tonnes. Mills now have a backlog of contracts in November and December, so soybean oil stocks will probably drop further for some time in the future.