I. Soybean

 

Price

 

Domestic soybean: Chinese farmers have almost completed soybean harvests by now, according to a survey by Cofeed. But farmers are not active sellers as they are bullish about the market, with less than 50% of soybean sold till now, so spot soybean market is in tight supply. In addition, there is a sharp decline in soybean production in producing regions around Jiangsu. These together highlight a premium in price and quality, so that traders have mostly raised prices to make purchases. Moreover, port shipments of imported soybeans are constrained due to strict commodity inspections. And market shares of domestic soybeans are also increasing, which further bolsters domestic soybean market. However, it is an established fact that new domestic soybeans will see an increase in production, and farmers have some pressure in storing soybeans with the coming of rainy and snowy weather in producing regions. In addition, downstream farmers have little appetite for high-priced soybeans, which is curbing the market. In a hybrid of the bull and the bear, short-term domestic soybean market will maintain a strengthening trend in fluctuations. Farmers’ sales sentiment will be closely watched.

 

Imported soybean: Traders begin to offer GM soybean at ports this week, and they have sharply lifted prices compared to that before the commodity inspections due to a reduction in imported soybean supply. However, port shipments are still limited, and new domestic soybeans are on the market and of improving quality, so that purchasers prefer domestic soybeans. Moreover, China has been purchasing U.S. soybeans at a brisk pace, which will also increase the supply. Overall, imported soybean market is predicted to be little changed.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5060	4940	120
	Inner Mongolia	Domestic, GB Grade 3	5000	4800	200
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	6900	6900	0
	Shandong	Imported, Argentina	N/A	N/A
		Imported, Brazil	N/A	N/A
		Imported, Uruguay	4550-4600	N/A
North China	Tianjin	Non-GM,Ethiopia	N/A	N/A
		Non-GM, Ukraine	N/A	N/A
		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	5060	4940	120
		Imported soybean	4050	3530	520

 

 

 

 

Crush: Crushers lower down operation rates as expected and with the decline larger than expected this week (Oct 24-30), as some are in maintenance time and some suspend for soybean shortages or for swelling meal inventories. Soybean crush at domestic mills totals 2,093,480 tonnes (meal 1,653,849 tonnes and oil 397,761 tonnes), down 103,770 tonnes or 4.72% from 2,197,250 tonnes last week. Meanwhile, operation rates (capacity utilization) are 59.79%, down 3.47% from 63.26% in the previous week. Soybean crush is expected to rise to 2.13 mln tonnes and move to 2.15 mln tonnes in the next two weeks, respectively.

 

Soybean crush nationwide is estimated at 8.61 mln tonnes in October at current utilization rate, lower than 9.1015 mln tonnes in the previous month but far above 6.6918 mln tonnes of the corresponding period last year.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 8,301,844 tonnes, up 1,314,844 tonnes or 18.82% from 6,987,000 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 77,908,530 tonnes, up 6,483,845tonnes or 9.08% from 71,424,685 tonnes of the corresponding period in 2019.

 

 

Inventory: As crushers lower down operation rates as expected and with the decline larger than expected this week, soybean crush at domestic mills totals 2.09 mln tonnes. And the volume of soybeans arriving at mills gets an increase. Hence, soybean stocks follow to mount higher in coastal regions this week. In the week as of Oct 30, China’s imported soybean stocks in coastal regions total 5,810,000 tonnes, up 273,600 tonnes by 4.94% from 5,536,400 tonnes last week and up by 95.95% from 2,964,900 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 whether soybean crush would stay high.

 

 

Arrivals and the outlook: According to Cofeed, soybean arrivals are 35 cargoes with 2.243 mln tonnes this week, a total of 126 cargoes with 8.262 mln tonnes for October so far. The import is predicted to be 133 cargoes or 9.149 mln tonnes for November, 8.8 mln tonnes for December, and 7.5 mln tonnes for January and 6 mln tonnes for February.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices decline this week (Oct 26-30). As of this Friday, prices settle down 20-80 CNY at 3,160-3,280 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,410	3,430	-20
North China	Tianjin	3,270	3,290	-20
	Hebei	3,270	3,290	-20
Central China	Hubei	3,260	3,320	-60
	Henan	3,350	3,400	-50
East China	Shandong	3,205	3,235	-30
	Jiangsu	3,170	3,190	-20
	Zhejiang	3,170	3,210	-40
	Shanghai	3,190	3,200	-10
	Fujian	3,210	3,250	-40
	Anhui	3,220	3,310	-90
South China	Guangdong	3,160	3,200	-40
	Guangxi	3,230	3,250	-20
National average		3,222	3,247	-25

 

 

Inventory: Soybean meal stocks fall this week on a larger-than-expected decline in soybean crush and on fair delivery. In the week as of Oct 30, China’s soybean meal stocks in coastal regions are 855,100 tonnes, down 66,400 tonnes by 7.21% from 921,500 tonnes last week but up by 77.70% from 481,200 tonnes of the corresponding period last year. As soybean crush is predicted to stay above 2.10 mln tonnes next week , soybean meal stocks may slow down declines.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices rise and then decline this week (Oct 26-30). As of this Friday, the price for GB Grade I settles at 7,520-7,620 CNY/tonne in domestic coastal regions, a rise of 10-160 CNY/tonne. The overall nationwide price index moves to 7,590 CNY/tonne, a weekly rise of 60 CNY or 0.80% from 7,530 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	7620	7610	10
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	7,700	7,450	250
		GB Grade 3	7,600	7,350	250
	Tianjin	GB Grade 1	7,620	7460-7480	140-160
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	7,540	7,500	40
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	7,590	7,510	80
		GB Grade 3	N/A	N/A
National average		GB Grade 1	7,590	7,555	35
		GB Grade 3	7,540	7,505	35

 

 

Inventory: Soybean oil stocks thus continue reducing this week, as buyers from various fields still have strong demand and the consumption of soybean oil to replace its rivals and in feed has been increasing. In the week ending Oct 30, China’s soybean oil commercial inventories total 1,251,200 tonnes, down 21,400 tonnes by 1.68% from 1,272,600 tonnes last week, down 855,000 tonnes by 6.4% from 1,336,700 tonnes a month earlier, and down 5,350 tonnes by 0.43% from 1,256,550 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,366,400 tonnes.