I. Soybean

 

Price

 

Domestic soybean: There is a big spread between previous trading prices and current ones, so that downstream buyers are staying on the sidelines. Moreover, some food manufacturers have turned to imported soybean markets, which further reduces the purchases in northeastern regions. However, it is an established fact that heavy rainfalls have led to a reduction in soybean production. In addition, soybeans have been sold out in Henan, Anhui, Shandong and Jiangsu, which may help drive the market. Traders now are focusing on new soybeans from Hunan and Hubei. Hence, soybean prices still 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: Port traders are slow in clearing shipments as it is in the seasonally weak demand for soybeans. In addition, soybean vessels are reaching ports gradually. These factors are cracking down on traders’ confidence. In addition, Chinese buyers are scooping up on soybeans due to handsome crush margins on Dalian Commodity Exchange, with a total of 48 cargoes bought from Monday to Thursday this week. The increase in supply will be negative to the market. However, the supply of imported soybeans is relatively limiting at Shandong ports, as traders there are controlling the quantity in circulation. In a hybrid of the bull and the bear, imported soybean market is predicted to stay stable with slight declines next week. Senior U.S. and Chinese officials will review the implementation of their phase one trade deal on August 15 amid bilateral tensions, according to a bloomberg report. Market participants can keep an eye on it.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5,220	5,220	0
	Inner Mongolia	Domestic, GB Grade 3	5,200	5,160	40
	Heilongjiang	Imported, Russia	4,650	4,650	0
East China	Jiangsu	Domestic soybean	6,800	6,800	0
	Shandong	Imported, Argentina	3790-3850	N/A
		Imported, Brazil	3600	3650	-50
		Imported, Uruguay	4000	4000
North China	Tianjin	Non-GM,Ethiopia	N/A	N/A
		Non-GM, Ukraine	4950	4950	0
		Non-GM,  Canada	N/A	N/A
		GM, PNW	N/A	N/A
		GM, U.S. GULF	N/A	N/A
National average		Domestic soybean	5,220	5,220	0
		Imported soybean	3,575	3,600	-25

 

 

 

 

Crush: Some millers are facing a temporary soybean shortage as they are unable to discharge soybean vessels when berths are under strain at ports, and some are struggling with ballooning soybean meal inventories, so soybean crush has been slightly lower this week (Aug 1-7). Specifically, soybean crush at domestic mills totals 2,044,400 tonnes (meal 1,615,076 tonnes and oil 388,436 tonnes), down 17,200 tonnes or 0.83% from 2,061,600 tonnes last week. Meanwhile, operation rates (capacity utilization) are 58.88%, down 0.5% from 59.38% in the previous week. Soybean crush is predicted to increase to around 2.05 mln tonnes and 2.08mln tonnes in the coming two weeks, respectively.

 

As of this week, soybean crush nationwide totals 75,897,264 tonnes in the soybean crop year of 2019/20 (from Oct 1st, 2019), up 3,640,079 tonnes or 5.04% from 72,257,185 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 53,867,750 tonnes, up 4,761,965 tonnes or 9.70% from 49,105,785 tonnes of the corresponding period in 2019.

 

 

Inventory: While soybean crush remains high at 2.04 mln tonnes, it is slow to unload soybean cargoes when berths are in tensions at some ports, so imported soybean inventories reduce slightly in coastal regions this week. In the week as of Aug 7, China’s imported soybean stocks in coastal regions total 6,038,700 tonnes, down 11,200 tonnes by 0.19% from 6,049,900 tonnes last week yet up by 9.85% from 5,497,200 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 27 cargoes with 1.788 mln tonnes this week, a total of 27 cargoes with 1.788 mln tonnes for August so far. The import is predicted to be 157.5 cargoes or 10.358 mln tonnes for August, 8.9 mln tonnes for September, 8.1 mln tonnes for October, 8 mln tonnes for November, and 7.8 mln tonnes for December. If so, China’s soybean imports will amount to 97.0448 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 continue to decline this week (Aug 3-7). As of this Friday, prices mostly settles down 20-80 CNY at 2,840-2,940 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,020	3,100	-80
North China	Tianjin	2,940	3,020	-80
	Hebei	2,940	3,020	-80
Central China	Hubei	2,930	3,000	-70
	Henan	3,000	3,090	-90
East China	Shandong	2,890	2,975	-85
	Jiangsu	2,845	2,925	-80
	Zhejiang	2,870	2,920	-50
	Shanghai	2,870	2,930	-60
	Fujian	2,870	2,930	-60
	Anhui	2,940	3,010	-70
South China	Guangdong	2,840	2,920	-80
	Guangxi	2,870	2,940	-70
National average		2,887	2,960	-73

 

 

Inventory:  Soybean meal stocks mount higher under high soybean crush. In the week as of Aug 7, China’s soybean meal stocks in coastal regions are 935,000 tonnes, up 74,800 tonnes by 8.70% from 860,200 tonnes last week and up by 8.84% from 859,000 tonnes of the corresponding period last year. Soybean crush is predicted to stay high at 2.05 mln tonnes next week, so soybean meal stocks may continue to increase.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices continue an overall uptrend this week (Aug 3-7). As of this Friday, the price for GB Grade I settles at 6,430-6,550 CNY/tonne in domestic coastal regions, mostly up 10-70 CNY/tonne. The overall nationwide price index moves to 6,515 CNY/tonne, a weekly rise of 45 CNY or 0.7% from 6,470 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	6,550	6,710	-160
North China	Qinhuangdao, Hebei	GB Grade 1	6,550	6,650	-100
	Tianjin	GB Grade 1	6430-6440	6,610	170-180
East China	Rizhao, Shandong	GB Grade 1	6,480	6,630	-150
	Qingdao,Shandong	GB Grade 1	6,480	6,610	-130
	Zhangjiagang, Jiangsu	GB Grade 1	6,550	6,710	-160
National average		GB Grade 1	6,515	6,670	-155
		GB Grade 3	6,465	6,620	-155

 

 

Inventory: Soybean oil inventories are slightly lower this week. In the week ending Aug 7, China’s soybean oil commercial inventories total 1,242,800 tonnes, down 3,150 tonnes by 0.25% from 1,245,950 tonnes last week, up 56,800 tonnes by 4.79% from 1,186,000 tonnes a month earlier, and down 134,400 tonnes by 9.76% from 1,377,200 tonnes of the corresponding period last year. And the five-year average at the same period is 1,355,500 tonnes.