Domestic soybean: Middlemen have little motivation in purchasing as domestic soybean market has been weak. The overall demand is weak in markets now. Northeastern traders have little demand from other regions and southern traders are clearing storage space fro rapeseed and wheat. These together crack down domestic soybean prices. However, prices in northeastern markets have not sharply fallen due to little surplus in local farmers, which helps support the market. Overall, in the absence of market demand, domestic soybean market may still have some downside potential in the near term.

 

Imported soybean: The market was affected by a rumor earlier this week about an investigation into the flow of GM-soybeans in Xi’an, Shaanxi, which brought some support to port traders. However, China is actively buying up on US soybean, and Brazil’s exports of agriculture products still stay strong. In addition, domestic soybean imports will are forecast to hit a monthly average of 10 mln tonnes from May to July. Meanwhile, the market is in dismal trading, as downstream buyers lack of enthusiasm for buying. In addition, domestic soybean prices also keep declining. Hence, there are still curbs on imported soybean markets. In a hybrid of the bull and the bear, the market for imported soybeans is predicted to remain stable next week. Besides, the coronavirus pandemic is growing severe in Brazil, adding to concerns over soybean shipments in this country, so participants can pay attention to soybean arrivals and domestic demand.

 

 

 

 

 

Crush: As oil mills have raised operation rates to an extremely high level this week (May 16-22), soybean crush at domestic mills totals 2,097,500 tonnes (meal 1,657,025 tonnes and oil 398,525 tonnes), up 185,300 tonnes or 9.69% from 1,912,200 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 60.41%, up 5.34% from 55.07% in the previous week. Soybean crush will fall to around 1.98 mln tonnes next week as mills will slightly lower down operation rates due to swollen inventories, but it will pick up again to 2.05 mln tonnes in that following week.

 

Soybean crush nationwide is estimated at 8.77 mln tonnes in May at current utilization rate, far above 5.7296  mln tonnes in the previous month and also above 7.8181 mln tonnes of the corresponding period last year.

 

As of this week, soybean crush nationwide totals 53,516,314 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), down 786,671 tonnes or 1.44% from 54,302,985 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 31,532,800 tonnes, up 381,215 tonnes or 1.22% from 31,151,585 tonnes of the corresponding period in 2019. 

 

 

Inventory: Soybean stocks continue rising in coastal regions this week as mills are busy unloading soybean cargoes, but the rise is smaller than last week as mills have further picked up operation rates. In the week as of May 22, imported soybean stocks in mills in domestic coastal regions total 4,500,500 tonnes, up 481,200 tonnes by 11.97% from 4,019,300 tonnes last week and up by 7.67% from 4,179,600 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 47 cargoes with 3.079 mln tonnes this week, a total of 117 cargoes with 7.6633 mln tonnes for May so far. The import is predicted to be 151 cargoes 9.865 mln tonnes for May, 10.5 mln tonnes for June, 10.4 mln tonnes for July, 9.5 mln tonnes for August and 8 mln tonnes for September. Statistics will be updated every week on account of fresh buying and renewed shipments.  

 

 

Price: Domestic soybean meal prices swing this week (May 18-22). As of this Friday, prices fluctuate by 10-30 CNY to settle at 2600-2720 CNY/tonne in domestic coastal regions. 

 

 

 

Inventory: Soybean meal stocks continue the uptrend this week as soybean crush climbs further higher to 2.09 mln tonnes. In the week ending May 22, soybean meal stocks in mills in domestic coastal regions are 521,000 tonnes, up 153,400 tonnes by 41.73% from 367,600 tonnes last week yet down by 14.98% from 612,800 tonnes of the corresponding period last year. Soybean meal stocks will likely continue increasing, as soybean crush is forecast to stay high at 1.98 mln tonnes and 2.05 mln tonnes in the next two weeks, respectively.

 

 

 

Price: Domestic soybean oil prices drop for a sixth consecutive week this week (May 18-22). As of this Friday, the price for GB Grade I settles at 5410-5520 CNY/tonne in domestic coastal regions, mostly down by 10-50 CNY/tonne, but with a partial rise of 20-50 CNY/tonne. 

 

 

 

Inventory: Soybean oil stocks continue the uptrend this week. In the week ending May 22, China’s commercial inventory has totaled 889,150 tonnes, up 20,820 tonnes by 2.4% from 868,330 tonnes last week, up 39,200 tonnes by 4.61% from 850,000 tonnes last month, and down 557,550 tonnes by 38.54% from 1,446,700 tonnes of the corresponding period last year. And the five-year average at the same period is 1,117,300 tonnes. Alongside rising operation rates, soybean oil stocks will probably keep rising for weeks to come.