I. Soybean

 

Price

 

Domestic soybean: The marketing of new soybeans starts counting down, so that traders are undercutting prices to clear stocks to make room for new crops. Moreover, soybean shipments are at a slow pace as soybeans are usually sold at floor prices. However, farmers in Hunan and Hubei are harvesting their yellow soybeans and are expecting a sharp decline in yield and production, so that they are reluctant to sell now. And Typhoon Maysak has passes over the northeast producing regions, which may make an impact on soybean quality and production in Heilongjiang province. In addition, some traders have been out of stocks now due to decreasing supplies around Jiangsu, and some with stock in hand are propping up prices, which is also supportive of soybean market in these regions. In a hybrid of the bull and the bear, domestic soybean market is predicted to steady with a slight decline next week. Participants can keep an eye on the influence of the typhoon in northeastern China.

 

Downstream buyers are not active under slack demand, and holders almost make no shipments due to strict commodity inspections at ports, which are undermining the market confidence. Meanwhile, China is still buying up on U.S. soybeans and may purchase at least 20 vessels this week for shipments from Pacific Northwest and U.S. Gulf Coast ports. This will amplify the supply outlook and will further bring negative effect to the market if there is a lack of bulk demand. However, the supply of certain grades is out of stock at port, which helps limit the decline in prices. Overall, imported soybean market is predicted to be little changed before the end of the commodity inspections. Participants can pay attention to upcoming vessels and domestic demand.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	4,960	4,960	0
	Inner Mongolia	Domestic, GB Grade 3	5,100	5,100	0
	Heilongjiang	Imported, Russia	4,620	4,620	0
East China	Jiangsu	Domestic soybean	6,800	6,800	0
	Shandong	Imported, Argentina	N/A	3730-3770
		Imported, Brazil	3580-3660	3610-3660	-30
		Imported, Uruguay	N/A	3910-4000
North China	Tianjin	Non-GM,Ethiopia	N/A	N/A
		Non-GM, Ukraine	4800	N/A
		Non-GM,  Canada	N/A	4800	0
		GM, PNW	N/A	N/A
		GM, U.S. GULF	N/A	N/A
National average		Domestic soybean	4,960	4,960	0
		Imported soybean	3,530	3,540	-10

 

 

 

 

Crush: Soybean crush eases this week (Aug 29-Sept 4) as some mills have limited or suspended production due to huge pressure from soybean meal inventories. The crush at domestic mills totals 1,951,050 tonnes (meal 1,541,330 tonnes and oil 370,700 tonnes), down 87,150 tonnes or 4.2% from 2,038,200 tonnes last week. Meanwhile, operation rates (capacity utilization) are 56.19%, down 2.51% from 58.70% in the previous week. Soybean crush is predicted to increase to around 2.0 mln tonnes and 2.05 mln tonnes in the coming two weeks, respectively.  

 

As of this week, soybean crush nationwide totals 83,869,314 tonnes in the soybean crop year of 2019/20 (from Oct 1st, 2019), up 4,615,379 tonnes or 5.82% from 79,253,935 tonnes of the same period last year. In calendar year of 2020 (from Jan. 1st, 2020), national soybean crush amounts to 61,839,800 tonnes, up 5,737,265 tonnes or 10.23% from 56,102,535 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean inventories increase in coastal China this week, as soybean crush falls to 1.95 mln tonnes and as soybeans are going into mills after a delay in unloading previously. In the week as of Sept 4, China’s imported soybean stocks in coastal regions total 6,479,400 tonnes, up 439,700 tonnes by 7.28% from 6,039,700 tonnes last week and up by 20.61% from 5,372,000 tonnes of the same period last year. Domestic soybean stocks usually decreased gradually from September in previous years, but China has purchased much more U.S. soybeans this year as a part of the trade deal, so it is necessary to focus on soybean crush.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 20 cargoes with 1.282 mln tonnes this week, a total of 12 cargoes with 759,000 tonnes for September so far. The import is predicted to be 137 cargoes or 9.012 mln tonnes for September, 8.5 mln tonnes for October, 8 mln tonnes for November, and 8.1 mln tonnes for December. If so, China’s soybean imports will amount to 96.7898 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 rising this week (Aug 30-Sept 4). As of this Friday, prices settle up 10-30 CNY at 2,865-2,970 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,070	3,060	10
North China	Tianjin	2,990	2,970	20
	Hebei	2,990	2,980	10
Central China	Hubei	2,960	2,930	30
	Henan	3,030	3,010	20
East China	Shandong	2,920	2,880	40
	Jiangsu	2,880	2,865	15
	Zhejiang	2,880	2,900	-20
	Shanghai	2,870	2,880	-10
	Fujian	2,880	2,870	10
	Anhui	2,920	2,930	-10
South China	Guangdong	2,890	2,850	40
	Guangxi	2,930	2,880	50
National average		2,920	2,893	27

 

 

Inventory: Soybean meal stocks are lower this week with a decline in soybean crush. In the week as of Sept 4, China’s soybean meal stocks in coastal regions are 1,162,300 tonnes, down 40,300 tonnes by 3.35% from 1,202,600 tonnes last week but up by 47.16% from 789,800 tonnes of the corresponding period last year. Soybean crush is predicted to stay high at 2 mln tonnes next week, so soybean meal stocks will not see a sharp decline and will stay at a high level.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices continue the uptrend this week (Aug 30-Sept 4). As of this Friday, the price for GB Grade I settles at 6,900-6,980 CNY/tonne in domestic coastal regions, mostly up 70-140 CNY/tonne. The overall nationwide price index moves to 6,950 CNY/tonne, a weekly rise of 120 CNY or 1.76% from 6,830 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	6940-6980	6,870	70-110
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	6,920	6,800	120
		GB Grade 3	6,820	N/A
	Tianjin	GB Grade 1	6,900	6810-6820	80-90
		GB Grade 3	6,900	N/A
East China	Rizhao, Shandong	GB Grade 1	6,900	6,770	130
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	6,970	6,870	100
		GB Grade 3	N/A	N/A
National average		GB Grade 1	6,990	6,870	120
		GB Grade 3	6,940	6,820	120

 

 

Inventory: In the week ending Sept 4, China’s soybean oil commercial inventories total 1,274,950 tonnes, down 32,500 tonnes by 2.49% from 1,307,450 tonnes last week, up 29,750 tonnes by 2.39% from 1,245,200 tonnes a month earlier, and down 57,350 tonnes by 4.3% from 1,332,300 tonnes of the corresponding period last year. And the five-year average at the same period is 1,359,630 tonnes.