Price: Imported soybean stocks are low at ports, among which trading soybeans have fallen to around 26,000 tonnes at Shandong port this week. Besides, domestic soybean prices also keep firm at present. Both these factors continue to support the market. Meanwhile, participants are worried about soybean shipments amid the spread of the novel coronavirus, as Argentina has started a nationwide lockdown from Friday and one port town in the country has announced to suspend activities. However, ports are operating normally in Brazil. And due to handsome crush margins, Chinese importers have bought 35-40 cargoes of Brazilian soybeans this week. Overall, the market for imported soybeans is predicted to stay at a narrow range in the short term. Participants can keep an eye on whether soybean shipments and logistics in top exporters will be disrupted or not. 

Crush: As operation rates continue the decline this week (Mar. 14-20), soybean crush at domestic mills totals 1,386,600 tonnes (meal 1,095,414 tonnes and oil 263,454 tonnes), down 84,500 tonnes or 5.7% from 1,471,100 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 39.85%, down 2.43 percentage points from 42.28% in the previous week. Soybean crush will slightly recover in the next two weeks to 1.48 mln tonnes and 1.58 mln tonnes, respectively.

Soybean crush nationwide is estimated at 6.67 mln tonnes in March at current utilization rate, above 6.3247 mln tonnes in the previous month and but below 7.0243 mln tonnes of the corresponding period last year.

As of this week, soybean crush nationwide totals 38,519,714 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 384,721 tonnes or 0.10% from 38,904,435 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 16,493,330 tonnes, up 740,265 tonnes or 4.70% from 15,753,035 tonnes of the corresponding period in 2019. 

Inventory: Imported soybean stocks continue to decline this week with smaller soybean volume arriving at domestic ports, but the decline is limited as soybean crush drops to 1.38 mln tonnes. In the week as of March 20th, imported soybean stocks in mills in domestic coastal regions total 2,409,300 tonnes in main domestic coastal oil mills, down 5,500 tonnes by 0.23% from 2,414,800 tonnes last week and down by 35.24% from 3,720,400 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 21 cargoes with 1.326 mln tonnes this week, a total of 45 cargoes with 2.893 mln tonnes for March so far. Soybean shipments in Brazil are slower as it takes longer time to quarantine amid the spread of the coronavirus. The import is predicted to be 74 cargoes with 4.825 million tonnes for March, 6.80 mln tonnes for April, 8.80 mln tonnes for May, 8.90 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. 16-20), domestic soybean meal prices are sharply higher. As of this Friday, the price settles up 120-180 yuan/tonne at 2,930-3,060 yuan/tonne in domestic coastal regions. 

Inventory: Soybean meal stocks continue to decrease this week as delivery increases with bouncing prices, albeit with a further decline in soybean crush. In the week ending March 20th, soybean meal stocks in mills in domestic coastal regions are 325,700 tonnes, down 114,800 tonnes by 26.06% from 440,500 tonnes last week and down by 47.72% from 623,100 tonnes of the corresponding period last year. Soybean crush will still remain at a low level of 1.48 mln and 1.58 mln tonnes in the next two week, so soybean meal stocks will probably stay low. And the tight supply in soybean meal market may not abate until late next month, for soybean imports may be lower than expected in April due to slow shipments in Brazil.

Price:  Domestic soybean oil prices rebound significantly this week (Mar 16-20). As of this Friday, the price for GB Grade I settles at 5,500-5,550 yuan/tonne in domestic coastal regions, mostly up 150-230 yuan/tonne. 

Inventory: Soybean oil stocks continue to fall this week with reducing output under a further decline in operation rates. In the week ending March 20th, China’s commercial inventory has totaled 1,321,530 tonnes, down 70,570 tonnes by 5.07% from 1,392,100 tonnes last week, up 156,530 tonnes by 13.44% from 1,165,000 tonnes last month, and down 58,470 tonnes by 4.24% from 1,380,000 tonnes of the corresponding period last year. And the five-year average at the same period is 1,172,200 tonnes.