China Soybean Weekly Report--as of July 17, 2020

2020-07-21 www.cofeed.com

I. Soybean

Price

Domestic soybean: China has been releasing grains into the market. While the supply of soybeans gets increasing in the market, the demand is not improving. This is bearish to domestic market. However, heavy rains have hit some regions in Jiangsu, Anhui and Hubei provinces, and even led to floods, so that many farmlands have been affected. This could lead to a decline in the production of early soybean crops in Hunan and Hubei. Therefore, there is now also a limited fall in soybean prices. 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 crushers turn to imported soybean market. In addition, traders are controlling the quantity of soybeans in circulation at ports, so sellers tend to lift the prices. However, port stocks are expected to further increase as imported soybean cargoes are still arriving at ports, so that some traders have lower confidence hiking prices. In a hybrid of the bull and the bear, imported soybean market is predicted to keep firm 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	5,560	0
	Inner Mongolia	Domestic, GB Grade 3	5,600	5,600	0
	Heilongjiang	Imported, Russia	5,130	N/A
East China	Jiangsu	Domestic soybean	6,850	6,850	0
North China	Tianjin	Non-GM, Kazakhstan	N/A	N/A
		Non-GM, Ukraine	N/A	N/A
		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	4,100	0
		Import, US Gulf	3500-3600	3500-3600	0
		Import, Uruguay	3630-3680	3630-3680	0
National average		Domestic soybean	5,560	5,560	0
National average		Imported soybean	3,565	3,565	0

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Crush: With a slight pickup in operation rates this week (July 11-17), soybean crush at domestic mills totals 2,063,500 tonnes (meal 1,630,165 tonnes and oil 392,065 tonnes), up 69,300 tonnes or 3.1% from 1,999,600 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 59.43%, up 1.84% from 57.59% in the previous week. Soybean crush is predicted to further increase to 2.09 mln tonnes next week and then fall fractionally to 2.06 mln tonnes in that following week, still at a very high level.

Soybean crush nationwide is estimated at 9.12 mln tonnes in July at current utilization rate, above 8.7332 mln tonnes in the previous month and also far above 6.7083 mln tonnes of the corresponding period last year.

As of this week, soybean crush nationwide totals 69,835,964 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), up 2,296,579 tonnes or 3.4% from 67,539,385 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 47,852,450 tonnes, up 3,464,465 tonnes or 7.80% from 44,387,985 tonnes of the corresponding period in 2019.

说明: 1595205564(1)

Inventory: Soybean stocks continue rising due to huge soybean arrivals at ports. In the week as of July 17, China’s imported soybean stocks in coastal regions total 5,858,600 tonnes, up 232,600 tonnes by 4.13% from 5,626,000 tonnes last week and up by 21.15% from 4,835,700 tonnes of the same period last year. Soybean stocks will gradually build up along with huge soybean arrivals in July and August.

说明: 1595227314(1)

Arrivals and the outlook: According to Cofeed, soybean arrivals are 32 cargoes with 2.105 mln tonnes this week, a total of 73 cargoes with 4.797 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, 8.8 mln tonnes for September, 8.1 mln tonnes for October, 7.5 mln tonnes for November, and 8.0 mln tonnes for December. Statistics will be updated every week on account of fresh buying and renewed shipments.

II. Soybean Meal

Price: Domestic soybean meal prices swing to higher this week (July 13-17). As of this Friday, prices mostly settles up 10-40 CNY at 2,830-2,940 CNY/tonne in domestic coastal regions.

China's Soybean Meal Weekly Price (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,040	3,010	30
North China	Tianjin	2,940	2,900	40
North China	Hebei	2,930	2,900	30
Central China	Hubei	2,950	2,910	40
Central China	Henan	2,980	3,000	-20
East China	Shandong	2,880	2,865	15
	Jiangsu	2,845	2,820	25
	Zhejiang	2,850	2,820	30
	Shanghai	2,860	2,820	40
	Fujian	2,850	2,830	20
	Anhui	2,910	2,880	30
South China	Guangdong	2,840	2,820	20
South China	Guangxi	2,880	2,860	20
National average		2,879	2,852	27

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Inventory: Soybean meal stocks further decline this week due to robust trading and fair deliveries. In the week as of July 17^th, soybean meal traded 1.8139 mln tonnes, an increase of 9.83% from 1.6515 mln tonnes in he previous week and a huge rise of 26.75% from 1.431 mln tonnes a year earlier. In the week ending July 17, China’s soybean meal stocks in coastal regions are 879,000 tonnes, down 42,900 tonnes by 4.65% from 921,900 tonnes last week yet up by 2.57% from 856,900 tonnes of the corresponding period last year. Soybean crush is predicted to rally to 2.09 mln tonnes next week, so soybean meal stocks will not see sharp decline.

说明: 1595227554(1)

III. Soybean Oil

Price: Domestic soybean oil prices mostly move sharply higher this week (July 13-17). As of this Friday, the price for GB Grade I settles at 6,200-6,320 CNY/tonne in domestic coastal regions, mostly up 260-400 CNY/tonne. The overall nationwide price index moves to 6,250 CNY/tonne, a weekly rise of 330CNY or 5.57% from 5,920 CNY/tonne in the previous week.

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
Northeast China	Dalian, Liaoning	GB Grade 1
Northeast China	Dalian, Liaoning	GB Grade 3
North China	Qinhuangdao, Hebei	GB Grade 1
North China	Tianjin	GB Grade 1	6,210	5850-5860	350-360
East China	Rizhao, Shandong	GB Grade 1	6,200	5,880	320
	Xiamen, Fujian	GB Grade 1	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	6,320	5,980	340
Central China	Zhengzhou, Henan	GB Grade 1	N/A	N/A
South China	Dongguan, Guangdong	GB Grade 1	6270-6300	5930-5940	340-360
	Fangchenggang, Guangxi	GB Grade 1	N/A	N/A
	Fangchenggang, Guangxi	GB Grade 3	N/A	N/A
National average		GB Grade 1	6,250	5,930	320
National average		GB Grade 3	6,200	5,880	320

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Inventory: Soybean oil stocks continue a small rise this week. In the week ending July 17, China’s soybean oil commercial inventory has totaled 1,196,800 tonnes, up 8,000 tonnes by 0.67% from 1,188,800 tonnes last week, up 196,800 tonnes by 19.68% from 1,000,000 tonnes last month, yet down 249,100 tonnes by 17.23% from 1,445,900 tonnes of the corresponding period last year. And the five-year average at the same period is 1,328,200 tonnes.

说明: 1595228433(1)

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