Price: Imported soybean stocks at ports are low at ports, and it is said that stocks for trading at Shandong port only total 32,000 tonnes. This fundamental continues to support the market. However, all agencies have raised production estimates for Brazilian soybeans. Brazilian farmers are to harvest bumper soybeans coupled with lower freight and quickly devaluing Brazilian real, making crush margins for Brazilian soybeans be handsome in China, so Chinese importers purchased 30 cargoes of Brazilian soybeans in the first four days this week. Besides, the novel coronavirus pneumonia is spreading globally, so it is necessary to pay attention to the epidemic and China-US trade relations in March. 

Crush: As operation rates decline for shortages this week (Feb. 29th-Mar. 6th), soybean crush at domestic mills totals 1,659,300 tonnes (meal 1,310,847 tonnes and oil 315,267 tonnes), down 267,900 tonnes or 13.9% from 1,927,200 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 47.69%, down 7.69 percentage points from 55.38% in the previous week. As operation rates will continue the decline in the next two weeks for an increasing number of mills will suspend production for soybean shortages, soybean crush is predicted to be about 1.54 mln tonnes and 1.42 mln tonnes, respectively.

As of this week, soybean crush nationwide totals 35,662,014 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 116,871 tonnes or 0.32% from 35,778,885 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 13,635,600 tonnes, up 1,008,115 tonnes or 7.98% from 12,627,485 tonnes of the corresponding period in 2019. 

Inventory: Imported soybean stocks continue to decrease this week with smaller soybean volume arriving at domestic ports. In the week as of March 6th, imported soybean stocks in mills in domestic coastal regions total 2,882,900 tonnes in main domestic coastal oil mills, down 928,800 tonnes by 24.37% from 3,811,700 tonnes last week and down by 33.02% from 4,304,300 tonnes of the same period last year. Soybean stocks are forecast to continue the decline as soybean imports are lower in March.

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 13 cargoes with 845,000 tonnes this week, a total of 10 cargoes with 649,000 tonnes for March so far. The import is predicted to be 74 cargoes with 4.825 million tonnes for March, 7.50 million tonnes for April, 8.30 mln tonnes for May, 8.70 mln tonnes for June and 9.0 mln tonnes for July. Statistics will be updated every week on account of variable and unstable buying.  

Price: This week (Mar. 2-6), domestic soybean meal prices move upward. As of this Friday, the price settles up 50-100 yuan/tonne at 2,750-2,910 yuan/tonne in domestic coastal regions. 

Inventory: Soybean meal stocks go on increasing this week as oil mills do not make bulk shipments. In the week ending March 6th, soybean meal stocks in mills in domestic coastal regions are 512,400 tonnes, up 41,000 tonnes by 8.70% from 471,400 tonnes last week yet down by 23.36% from 668,600 tonnes of the corresponding period last year. Soybean meal stocks may fall again, for mills will reduce soybean crush to 1.54 mln and 1.42 mln tonnes in the coming two weeks, respectively.

Price: This week (Mar. 2-6), domestic soybean oil prices mostly rebound. As of this Friday, the price for GB Grade I settles at 5,560-5,800 yuan/tonne in domestic coastal regions, mostly up 20-100 yuan and with a partial decline of 170-200 yuan/tonne. 

Inventory: Albeit with a decline in operation rates, soybean oil stocks continue to grow as the demand remains dismal under the influence of the epidemic. In the week ending March 6th, China’s commercial inventory has totaled 1,399,550 tonnes, up 55,350 tonnes by 4.11% from 1,344,200 tonnes last week, up 527,550 tonnes by 60.5% from 872,000 tonnes last month, and up 49,550 tonnes by 3.47% from 1,350,000 tonnes of the corresponding period last year. And the five-year average at the same period is 1,179,560 tonnes.