Domestic soybean: Local farmers have little surplus in hand and purchasing bodies just releases limited quantities into the market. Meanwhile, some traders have bought soybeans at high cost and are thus reluctant to sell at significantly lower prices. The tight supply outlook is bullish to the market. However, downstream buyers are cautious purchasing due to frequent fluctuations in soybean prices, so the trading remains tepid in the market. Moreover, some traders in southern regions are set to clear up stocks for upcoming wheat crops. Dominated by bullish factors, domestic soybean market is predicted to keep firm next week.

 

Imported soybean: Soybean stocks continue to decline to around 7,000-8,000 tonnes at Shandong port now, and domestic soybean prices have rallied again, which help bolster the imported soybean market. However, some traders are trying to lower down trading prices to lock profits. In the meantime, Chinese importers are still buying up on soybeans due to considerable crush margins. And Brazil’s soybean exports are forecast to hit a historical high of 13.8 mln tonnes in April, of which some 10 mln tonnes may be heading for China. In a hybrid of the bull and the bear, the market for imported soybeans is predicted to stay stable in the short term.

 

 

 

 

 

Crush: As operation rates pick up this week (Apr. 11-17), soybean crush at domestic mills totals 1,582,400 tonnes (meal 1,250,096 tonnes and oil 300,656 tonnes), up 225,800 tonnes or 16.64% from 1,356,600 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 45.58%, up 6.51% from 39.07% in the previous week. Soybean crush will continue to rise to around 1.75mln tonnes and 1.85 mln tonnes in the next two weeks, respectively. 

　

Soybean crush nationwide is estimated at 6.87mln tonnes in April at current utilization rate, above 6.5783 mln tonnes in the previous month and but below 7.1429 mln tonnes of the corresponding period last year.

 

As of this week, soybean crush nationwide totals 44,363,514 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 1,324,821 tonnes or 2.9% from 45,688,335 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 22,337,100 tonnes, down 199,835 tonnes or 0.09% from 22,536,935 tonnes of the corresponding period in 2019. 

 

 

Inventory: Soybean stocks fractionally decrease this week, as soybean crush picks up to 1.58 mln tonnes. In the week as of Apr. 17, imported soybean stocks in mills in domestic coastal regions total 2,381,900 tonnes in main domestic coastal oil mills, down 238,500 tonnes by 9.10% from 2,620,400 tonnes last week and down by 36.18% from 3,732,500 tonnes of the same period last year. As soybean arrivals are lower than forecast, soybean stocks may still stay at a low level.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 24 cargoes with 1.574 mln tonnes this week, a total of 49 cargoes with 3.279 tonnes for April so far. The import is predicted to be 104 cargoes with 6.82 mln tonnes for April, 9.9 mln tonnes for May, 9.8 mln tonnes for June, 9.6 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: Domestic soybean meal prices decline this week (Apr. 13-17). As of this Friday, the price settles up 30-80 yuan at 2,910-3,160 yuan/tonne in domestic coastal regions. 

 

 

 

Inventory: Soybean meal stocks continue to reduce to a record low at least since 2011, as the overall soybean crush has not returned to a normal level in spite of a pickup. In the week ending Apr. 17, soybean meal stocks in mills in domestic coastal regions are 136,100 tonnes, down 23,600 tonnes by 14.78% from 159,700 tonnes last week and down by 80.60% from 701,800 tonnes of the corresponding period last year. As soybean crush is forecast to be around 1.75 mln tonnes next week, soybean meal stocks may rally gradually. Besides, there will be a monthly average of nearly 10 mln tonnes of soybean vessels arriving in China from May-July, so the tight supply will follow to ease at that time.

 

 

 

Price: Domestic soybean oil prices move lower this week (Apr. 13-17). As of this Friday, the price for GB Grade I settles at 5,720-5,900 yuan/tonne in domestic coastal regions, a decline of 20-100 yuan/tonne. 

 

 

 

Inventory: Soybean oil stocks continue the decline this week due to low soybean crush in the previous weeks and decent soybean oil deliveries in oil mills. In the week ending Apr. 17, China’s commercial inventory has totaled 904,450 tonnes, down 123,200 tonnes by 11.99% from 1,027,650 tonnes last week, down 465,550 tonnes by 33.98% from 1,370,000 tonnes last month, and down 454,450 tonnes by 33.44% from 1,358,900 tonnes of the corresponding period last year. And the five-year average at the same period is 1,073,030 tonnes.