I. Soybean

 

Price

 

Domestic soybean: Traders are trying to speed up their shipments with panic, but the demand is not improving in the market. However, traders in northeastern China are reluctant to continue to sharply lower down their quotes under the support of high cost. Besides, heavy rains and even floods have hit some regions in Jiangxi, Anhui and Hubei provinces recently, which could lead to a production cut in early soybean crops in Hubei. Hence, soybean prices keep firm in regions around Jiangsu provinces. In a hybrid of the bull and the bear, domestic soybean market is predicted to keep range-bound next week.

 

Imported soybean: Non-GM soybeans at ports are tracking a decline in domestic soybean prices. Add to that, the demand is dismal at present so that port traders are unable to quicken up soybean shipments. Besides, China is actively purchasing U.S. soybeans, which will also increase the supply. These are all weighing down imported soybean prices. However, the supply of imported soybeans is relatively limiting at Shandong ports, as traders there are controlling the quantity in circulation. Besides, the Trump administration is preparing to order China to sharply reduce the number of diplomats posted in the United States, according to media reports. Market participants are worried about the implementation of the phase-one trade deal amid tensions between these two countries.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5,220	5,300	-80
	Inner Mongolia	Domestic, GB Grade 3	5,160	5,360	-200
	Heilongjiang	Imported, Russia	4,650	5,000	-350
East China	Jiangsu	Domestic soybean	6,800	6,800	0
	Shandong	Imported, PNW	N/A	N/A
		Imported, Brazil	3650	5,030	-1380
		Imported, Uruguay	4000	N/A
North China	Tianjin	Non-GM,Ethiopia	N/A	N/A
		Non-GM, Ukraine	4950	N/A
		Non-GM,  Canada	N/A	N/A
		GM, PNW	N/A	3,650
		GM, U.S. GULF	N/A	4,000
National average		Domestic soybean	5,220	5,300	-80
		Imported soybean	3,600	3,600	0

 

 

 

 

Crush: As crushing plants pick up operation rates higher than expected with incoming soybeans this week (Jul 25-31), soybean crush at domestic mills totals 2,061,600 tonnes (meal 1,628,664 tonnes and oil 391,704 tonnes), up 106,300 tonnes or 5.4% from 1,955,300 tonnes in the previous week. Meanwhile, operation rates (capacity utilization) are 59.38%, up 3.06% from 56.32% in the previous week. Soybean crush is predicted to continue increasing to around 2.08 mln tonnes and 2.12 mln tonnes in the coming two weeks, respectively.

 

Soybean crush nationwide is estimated at 8.88 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 73,852,864 tonnes in the soybean crop year of 2019/20 (from October 1st, 2019), up 3,253,279 tonnes or 4.60% from 70,599,585 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 51,823,350 tonnes, up 4,375,165 tonnes or 9.22% from 47,448,185 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean stocks increase this week, as mills have put a large quantity of soybeans in storage amid huge imports. In the week as of July 31, China’s imported soybean stocks in coastal regions total 6,049,900 tonnes, up 311,800 tonnes by 5.43% from 5,738,100 tonnes last week and up by 9.11% from 5,544,500 tonnes of the same period last year. Soybean stocks will gradually build up along with huge soybean arrivals in August.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 33 cargoes with 2.119 mln tonnes this week, a total of 147cargoes with 9.614 mln tonnes for July so far. The import is predicted to be 157.5 cargoes or 10.358 mln tonnes for August, 8.8 mln tonnes for September, 8.1 mln tonnes for October, 7.5 mln tonnes for November, and 7.8 mln tonnes for December. If so, China’s soybean imports will amount to 96.9448 mln tonnes in 2019/20 (Oct-Sept). Statistics will be updated every week on account of fresh buying and renewed shipments.  

 

II. Soybean Meal

 

Price: Domestic soybean meal prices swing to decline this week (July 27-31). As of this Friday, prices mostly settles down 10-50 CNY at 2,900-3,020 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,100	3,120	-20
North China	Tianjin	3,020	3,050	-30
	Hebei	3,020	3,050	-30
Central China	Hubei	3,000	3,050	-50
	Henan	3,090	3,110	-20
East China	Shandong	2,975	3,000	-25
	Jiangsu	2,925	2,955	-30
	Zhejiang	2,920	3,000	-80
	Shanghai	2,930	2,960	-30
	Fujian	2,930	2,980	-50
	Anhui	3,010	3,050	-40
South China	Guangdong	2,920	2,940	-20
	Guangxi	2,940	2,980	-40
National average		2,960	2,989	-29

 

 

Inventory: Soybean meal stocks continue decreasing along with quick soybean meal shipments. In the week as of July 31, China’s soybean meal stocks in coastal regions are 860,200 tonnes, down 14,900 tonnes by 1.70% from 875,100 tonnes last week yet up by 2.13% from 842,200 tonnes of the corresponding period last year. Soybean crush is predicted to stay high at 2.08 mln tonnes next week, so soybean meal stocks may see a light increase.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices continue an overall uptrend this week (July 27-31). As of this Friday, the price for GB Grade I settles at 6,410-6,540 CNY/tonne in domestic coastal regions, mostly up 10-50 CNY/tonne with a partial decline of 30 CNY/tonne. The overall nationwide price index moves to 6,470 CNY/tonne, a weekly rise of 20 CNY or 0.31% from 6,450 CNY/tonne in the previous week.

 

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
South China	Guangzhou	GB Grade 1	6,710	6360-6380	330-350
North China	Qinhuangdao, Hebei	GB Grade 1	6,650	6,350	300
	Tianjin	GB Grade 1	6,610	6,220	390
East China	Rizhao, Shandong	GB Grade 1	6,630	6,260	370
	Qingdao,Shandong	GB Grade 1	6,610	6,220	390
	Zhangjiagang, Jiangsu	GB Grade 1	6,710	6,330	380
South China	Fangchenggang, Guangxi	GB Grade 1	6,640	6,290	350
National average		GB Grade 1	6,670	6,320	350
		GB Grade 3	6,620	6,270	350

 

 

Inventory: In spite of a pickup in soybean crush, soybean oil stocks just increase very slightly. It can be noted that stockpiles even decline in Shandong, for many local crushers are in downtime. In the week ending July 31, China’s soybean oil commercial inventories total 1,245,950 tonnes, up 9,700 tonnes by 0.78% from 1,236,250 tonnes last week, up 105,950 tonnes by 9.29% from 1,140,000 tonnes last month, yet down 167,350 tonnes by 11.84% from 1,413,300 tonnes of the corresponding period last year. And the five-year average at the same period is 1,363,400 tonnes.