Domestic soybean: Traders across the country find it difficult to make delivery amid dismal demand for soybeans, and warmer weather in southern regions requires higher standard for soybean storage. Moreover, traders are in hurry to clear stocks as rapeseed and wheat are set to get marketed at the end of May. There is still not a pickup in demand from downstream buyers, in addition to huge imported soybeans, which is bearish to domestic market. However, local farmers have little surplus in hand and some traders who expect a tight supply outlook are reluctant to sharply cut down prices, which give some support to the market.  On the whole, in the absence of demand, domestic soybean market may still have some downside potential in the short run.

Imported soybean: Vessels with about 50,000 tonnes of U.S. soybeans and 15,000-20,000 tonnes of Brazilian soybeans have arrived at domestic ports this week, which has added to supply in the market. And China has increased U.S. soybean purchases, while still buying up on Brazilian crops due to handsome crushing margins. The monthly soybean arrivals at domestic ports will be huge from May to July, but downstream buyers still have adequate stocks and are not active making purchases. In addition, domestic soybean prices have also snapped off the uptrend, which is also negative to the market. Dominated by bearish factors, the market for imported soybeans is predicted to have downside potential in the short run.

Crush: Oil mills have resumed normal operation rates this week (Apr 25-May 1) due o decent crush margins, some of which have even worked at full capacity. Soybean crush at domestic mills totals 1,777,000 tonnes (meal 1,403,830 tonnes and oil 337,630 tonnes), up 102,100 tonnes or 6.10% from 1,674,900 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 51.18%, up 2.9% from 48.24% in the previous week. With huge soybean cargoes arriving at ports, the crush will continue to rise to around 1.82 mln tonnes and 1.98 mln tonnes in the next two weeks, respectively. 

Soybean crush nationwide is estimated at 6.74 mln 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 47,815,414 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 1,023,071 tonnes or 2.09% from 48,838,485 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 25,789,000 tonnes, up 101,915 tonnes or 0.04% from 25,687,085 tonnes of the corresponding period in 2019. 

Inventory: Soybean stocks continue mounting higher in coastal regions this week, as mills have unloaded cargoes at ports. In the week as of May 1, imported soybean stocks in mills in domestic coastal regions total 3,033,000 tonnes in main domestic coastal oil mills, up 333,200 tonnes by 12.34% from 2,699,800  tonnes last week yet down by 28.74% from 4,256,600 tonnes of the same period last year. Soybean stocks will gradually build up alongside huge soybean arrivals from May to July.

Arrivals and the outlook: According to Cofeed, soybean arrivals are 17 cargoes with 1.102 mln tonnes this week. The import is predicted to be 151 cargoes 9.865 mln tonnes for May, 10 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 continue to decline this week (Apr. 27-30). As of this Friday, prices mostly settles down 20-100 CNY at 2800-2960 CNY/tonne in domestic coastal regions. 

Inventory: Soybean meal stocks continue growing this week as soybean crush picks up further to 1.77 mln tonnes, but the overall stocks remain low. In the week ending May 1, soybean meal stocks in mills in domestic coastal regions are 179,600 tonnes, up 17,100 tonnes by 10.52% from 162,500 tonnes last week yet down by 72.68% from 657,600 tonnes of the corresponding period last year. As weekly soybean crush is forecast to reach 1.82 mln tonnes and 1.98 mln tonnes in coming two weeks, soybean meal stocks may rally from the low level and the tight supply will follow to ease gradually.

Price: Domestic soybean oil prices drop for a third consecutive week this week (Apr. 26-30). As of this Friday, the price for GB Grade I settles at 5520-5660 CNY/tonne in domestic coastal regions, a decline of 60-160 yuan/tonne. 

Inventory: Soybean oil stocks continue declining this week, but the decline is obviously smaller. In the week ending May 1, China’s commercial inventory has totaled 812,150 tonnes, down 25,500 tonnes by 3.04% from 837,650 tonnes last week, down 367,850 tonnes by 31.17% from 1,180,000 tonnes last month, and down 583,050 tonnes by 41.79% from 1,395,200 tonnes of the corresponding period last year. And the five-year average at the same period is 1,058,000 tonnes.