Domestic soybean: Local farmers have a strong sentiment for higher prices, as they have very little supply in hand. Traders are also stalling sales and propping up prices. However, there is not a sharp increase in demand from downstream buyers, who are very cautious in buying at current prices. 

 

Imported soybean: As port soybeans are not in huge supplies at present, of which it is only around 10,000 tonnes at Shandong port. Moreover, domestic soybean prices also keep strengthening. Hence, participants in the distributing soybeans have a strong sentiment for higher prices. However, Chinese importers are purchasing Brazilian soybeans due to handsome crush margins, and Brazil’s soybean shipment heading for China hit a single-month record high in March to reach 10 mln tonnes.  Dominated by bullish factors, the market for imported soybeans is predicted to keep firm in the short term.

 

 

 

Crush: As mills are lowering operation rates due to soybean shortages this week (Mar. 28-Apr. 3), soybean crush at domestic mills totals 1,438,400 tonnes (meal 1,136,336 tonnes and oil 273,296 tonnes), down 37,700 tonnes or 2.55% from 1,476,100 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 41.43%, down 1.08 percentage points from 42.51% in the previous week. Soybean crush will fall further to around 1.35 mln tonnes next week, but will rise to 1.60 mln tonnes that following week as there will be more soybean cargoes arriving at ports, according to Cofeed.

 

As of this week, soybean crush nationwide totals 41,434,214 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 742,521 tonnes or 1.76% from 42,176,735 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 19,407,800 tonnes, up 382,45 tonnes or 2.01% from 19,025,335 tonnes of the corresponding period in 2019. 

 

 

Inventory: Imported soybean stocks continue to increase this week, as soybean crush declines further to 1.43 mln tonnes under low operation rates for soybean shortages. But the increment is small, for soybean imports are not huge. In the week as of Apr. 3, imported soybean stocks in mills in domestic coastal regions total 2,525,100 tonnes in main domestic coastal oil mills, up 21,800 tonnes by 0.87% from 2,503,300 tonnes last week yet down by 36.10% from 3,951,800 tonnes of the same period last year. Soybean stocks are forecast to continue to stay relatively low as soybean imports are small in April.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 16 cargoes with 1.044 mln tonnes this week, a total of 8 cargoes with 523,000 tonnes for April so far. The import is predicted to be 104 cargoes with 6.82 mln tonnes for April, 9.6 mln tonnes for May, 9.5 mln tonnes for June, 9.3 mln tonnes for July, 8.5 mln tonnes for August and 7.5 mln tonnes for September. Statistics will be updated every week on account of variable and unstable buying.  

 

 

Price: This week (Mar. 30-Apr. 3), domestic soybean meal prices are mixed. As of this Friday, the price fluctuate by 30-100 yuan/tonne to settle at 2,950-3,250 yuan/tonne in domestic coastal regions. 

 

 

 

Inventory: Soybean meal stocks continue to decrease to a historical low this week as soybean crush declines to 1.43 mln tonnes. In the week ending Apr. 3, soybean meal stocks in mills in domestic coastal regions are 167,800 tonnes, down 104,900 tonnes by 38.47% from 272,700 tonnes last week and down by 72.41% from 608,400 tonnes of the corresponding period last year. Soybean crush will still remain at a low level of 1.35mln and 1.60 mln tonnes in the next two weeks, so soybean meal stocks will probably continue to stay low. And the tight supply in soybean meal market may not abate until late April.

 

 

 

Price:  Domestic soybean oil prices mostly decline this week (Mar. 30-Apr. 3). As of this Friday, the price for GB Grade I settles at 5,500-5,660 yuan/tonne in domestic coastal regions, mostly down 10-50 yuan/tonne with a partial rise of 10-100 yuan/tonne. 

 

 

 

Inventory: Soybean oil stocks continue to decline this week, as mills are keeping low operation rates and soybean oil shipments have been decent recently. In the week ending Apr. 3, China’s commercial inventory has totaled 1,151,260 tonnes, down 105,000 tonnes by 8.36% from 1,256,270 tonnes last week, down 208,740 tonnes by 15.35% from 1,360,000 tonnes last month, and down 186,940 tonnes by 13.97% from 1,338,200 tonnes of the corresponding period last year. And the five-year average at the same period is 1,130,700 tonnes.