I. Soybean

Price

 

Domestic soybean: China has been releasing grains into the market. And new early soybeans in Hunan and Hubei will go into the market in July. Therefore, domestic soybean market will be negative due to an increase in supply and tepid demand. However, traders are reluctant to sell soybeans at low prices due to high-cost soybeans in hand, which will limit the price declines. Overall, domestic soybean market is predicted to have some downside potential next week.

 

Imported soybean: Imported soybeans are more attractive than domestic soybeans at present in terms of prices, so that the trading has also turned better as some buyers turn to imported soybean market. In addition, PNW and Argentine soybeans are not in huge supplies at ports now, and soybean flows are limited at ports due to the supervision, so traders are trying to prop up prices. But some 200,000 tonnes from Uruguay is expected to reach ports gradually, which will increase the port stocks at that time. In a hybrid of the bull and the bear, imported soybean market is predicted to stay stable next week. Participants can keep an eye on soybean arrivals at ports and the demand.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5,560	5,620	-60
	Inner Mongolia	Domestic, GB Grade 3	5,600	5,600	0
East China	Jiangsu	Domestic soybean	6,850	6,800	50
North China	Tianjin	Non-GM, Kazakhstan	N/A	N/A
		Non-GM, Ukraine	N/A	5,200
		Non-GM,  Canada	N/A	N/A
		GM, US PNW	N/A	N/A
		GM, US GULF	N/A	N/A
East China	Shandong	Import, PNW	4,100	4000-4060	40-100
		Import, US Gulf	3500-3600	3,550	50
		Import, Uruguay	3630-3680	3,580	50-100
National average		Domestic soybean	5,560	5,620	-60
		Imported soybean	3,565	3,550	15

 

 

 

 

Crush: Operation rates fractionally drop this week (July 4-10), as some mills have to suspend production for swelling soybean meal inventories and some for a temporary lack of soybeans. Soybean crush at domestic mills totals 1,999,600 tonnes (meal 1,579,684 tonnes and oil 379,924 tonnes), down 43,100 tonnes or 2.1% from 2,042,700 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 57.59%, down 1.24% from 58.83% in the previous week. Soybean crush is predicted to increase to 2.05 mln tonnes and 2.10 mln tonnes in the next two weeks, respectively.

 

As of this week, soybean crush nationwide totals 67,772,464 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), up 1,738,679 tonnes or 2.63% from 66,033,785 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 45,788,950 tonnes, up 2,906,565 tonnes or 6.78% from 42,882,385 tonnes of the corresponding period in 2019.

 

 

Inventory: Soybean stocks are slightly higher due to huge soybean arrivals at ports. In the week as of July 10, China’s imported soybean stocks in coastal regions total 5,626,000 tonnes, up 83,100 tonnes by 1.50% from 5,542,900 tonnes last week and up by 31.74% from 4,270,400 tonnes of the same period last year. Soybean stocks will gradually build up along with huge soybean arrivals in July and August.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 33 cargoes with 2.152 mln tonnes this week, a total of 39 cargoes with 2.552 mln tonnes for July so far. The import is predicted to be 157.5 cargoes or 10.321 mln tonnes for July, 10.1 mln tonnes for August, 8.4 mln tonnes for September, 7.3 mln tonnes for October, and 7.4 mln tonnes for November. Statistics will be updated every week on account of fresh buying and renewed shipments.  

 

II. Soybean Meal

 

Price: Domestic soybean meal prices continue the rise this week (July 6-10). As of this Friday, prices mostly settles up 40-80 CNY at 2820-2890 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,010	2,980	30
North China	Tianjin	2,900	2,830	70
	Hebei	2,900	2,820	80
Central China	Hubei	2,910	2,860	50
	Henan	3,000	2,910	90
East China	Shandong	2,865	2,810	55
	Jiangsu	2,820	2,750	70
	Zhejiang	2,820	2,765	55
	Shanghai	2,820	2,780	40
	Fujian	2,830	2,760	70
	Anhui	2,880	2,820	60
South China	Guangdong	2,820	2,770	50
	Guangxi	2,860	2,790	70
National average		2,852	2,801	51

 

 

Inventory: Soybean meal stocks break off an 11-week uptrend to decline this week, as soybean crush falls to 1.99 mln tonnes and soybean meal has been in strong trading. In the week ending July 10, China’s soybean meal stocks in coastal regions are 921,900 tonnes, down 76,100 tonnes by 7.63% from 998,000 tonnes last week yet up by 0.98% from 912,900 tonnes of the corresponding period last year. Soybean crush is predicted to rally to 2.06 mln tonnes next week, so soybean meal stocks will not see sharp decline.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices mostly move moderately higher this week (July 6-10). As of this Friday, the price for GB Grade I settles at 5850-5980 CNY/tonne in domestic coastal regions, mostly up 10-60 CNY/tonne and some with a partial decline 10 CNY from last week. 

 

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
Northeast China	Dalian, Liaoning	GB Grade 1
		GB Grade 3
North China	Qinhuangdao, Hebei	GB Grade 1
	Tianjin	GB Grade 1	5850-5860	5,860	-10
East China	Rizhao, Shandong	GB Grade 1	5,880	5,850	30
	Xiamen, Fujian	GB Grade 1	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	5,980	6000-6010	20-30
Central China	Zhengzhou, Henan	GB Grade 1	N/A	N/A
South China	Dongguan, Guangdong	GB Grade 1	5930-5940	5930-5950	-10
	Fangchenggang, Guangxi	GB Grade 1	N/A	N/A
		GB Grade 3	N/A	N/A
National average		GB Grade 1	5,930	5,920	10
		GB Grade 3	5,880	5,880	0

 

 

Inventory: Soybean oil stocks continue a rise this week, but the rise is smaller due to a slight decline in soybean crush and as mills are quickening up deliveries. In the week ending July 10, China’s soybean oil commercial inventory has totaled 1,188,800 tonnes, up 6,520 tonnes by 0.55% from 1,182,280 tonnes last week, up 236,300 tonnes by 24.81% from 952,500 tonnes last month, yet down 239,700 tonnes by 16.78% from 1,428,500 tonnes of the corresponding period last year. And the five-year average at the same period is 1,308,600 tonnes.