Price: Imported soybean supply to distribution markets remains scanty at ports, and traders are in fair shipments. However, US President Donald Trump is upbeat about US-China trade negotiations, saying that trade talks are “moving right along”. And according to a report by Xinhua News, China supports relevant enterprises to import soybean and pork from the United States and the Customs Tariff Commission of the State Council is working on tax exemptions on part of the imports in light of applications submitted by related enterprises. If bilateral trade relations get improved, China is likely to increase US soybean imports. In addition, Chinese importers now are scooping up South American soybeans due to good crush margins. Overall, the distributed market for imported soybeans is predicted to keep firm in the near term.

Crush: Some mills lower down operation rates as expected due to soybean shortages this week (Nov. 30-Dec. 6), so soybean crush at domestic mills totals 1,652,600 tonnes (meal 1,305,554 tonnes and oil 313,994 tonnes), down 122,750 tonnes, or 6.91%, from 1,775,350 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 45.32%, down 3.65 percentage points from 48.97% in the previous week. Soybean crush is predicted to increase to around 1.71 mln tonnes next week and to 1.80 mln tonnes that following week. 

As of this week, soybean crush nationwide totals 15,368,200 tonnes in the crushing year of 2019/20 (from October 1st, 2019), down 1,939,385 tonnes, or 11.2%, from 17,307,585 tonnes of the same period last year. In calendar year of 2019 (from Jan. 1st, 2019), national soybean crush amounts to 77,409,615 tonnes, down 5,327,765 tonnes, or 6.43%, from 82,737,380 tonnes of the corresponding period in 2018. 

Inventory: Imported soybean stocks continue to increase this week on lower operation rates for crush. In the week as of December 6th, imported soybean stocks in mills in domestic coastal regions total 3,320,600 tonnes in main domestic coastal oil mills, up 332,330 tonnes by 11.12% from 2,988,300 tonnes last week yet down by 41.85% from 5,710,700 tonnes of the same period last year. With huge imports arriving at ports in December, the stocks will probably post modest rises later.

Import and its outlook: According to Cofeed, imported soybean is 25 cargoes with 1.612 mln tonnes this week, a total of 22 cargoes with 1.422 mln tonnes for December so far. The import is predicted to be 144 cargoes with 9.349 mln tonnes for December, and 7 mln tonnes for January, 4.5 mln tonnes for February, and 4.8 mln tonnes for March. Statistics will be updated every week on account of variable and unstable buying.  

Price: This week (Dec. 2-6), domestic soybean meal prices are adjusting in fluctuation. As of this Friday, the price fluctuates by 10-40 yuan/tonne to settle at 2,840-3,010 yuan/tonne in domestic coastal regions. 

Inventory: In the week as of December 6th, soybean meal trading totals 711,120 tonnes, down 22.29% from 915,514 tonnes last week. Therefore, soybean meal stocks pile up further higher this week on lower trading volume. In the week as of December 6th, the inventory in mills in domestic coastal regions totals 422,900 tonnes, up 9,200 tonnes by 2.22% from 413,700 tonnes last week yet down by 54.88% from 937,400 tonnes of the corresponding period last year. As soybean crush is expected to go up to 1.71 mln tonnes and 1.80 mln tonnes in the coming two weeks, soybean meal stocks may continue to increase and to see an easing supply pattern.

Price: This week (Dec. 2-6), domestic soybean oil prices mostly rally. As of this Friday, the price for GB Grade I settles at 6520-6630 yuan/tonne in domestic coastal regions, mostly up by 30-100 yuan/tonne with a partial decline of 10-20 yuan/tonne. 

Inventory: In addition to a decline in soybean crush, there are many forward contracts signed previously, so mills have been in fair shipments these days, and even seen long lines waiting for picking up goods in Tianjin, northeastern and eastern regions. In the week as of Dec. 6th, China’s commercial inventory has totaled 996,350 tonnes, down 64,550 tonnes by 6.08% from 1,060,900 tonnes last week, down 207,150 tonnes by 17.21% from 1,203,500 tonnes last month, and down 768,650 tonnes by 43.55% from 1,765,000 tonnes of the corresponding period last year. And the five-year average at the same period is 1,286,330 tonnes. There is a total of 1,500,450 tonnes in soybean oil contracts to be fulfilled domestically, so soybean oil stocks will see a rundown in later period.