I. Soybean

 

Price

 

Domestic soybean: Domestic farmers are selling soybeans at a slow pace due to a strong price outlook among farmers and investors. And recent rainfalls and snows across northeastern production regions have also influenced soybean purchases and sales and thus lessened its supplies, in addition to a sharp reduction in soybean production around Jiangsu Province. This highlights a premium in soybean quality and price on the market now. Moreover, imported soybean shipments are also constrained by strict commodity inspection, which gradually grants market share to domestic soybeans and thus bolsters domestic soybean market. However, financial pressure gradually comes close to the end of the year, so that some traders have undercut prices to recoup funds. And market entities and food manufacturers are cautious about high prices and slow in purchasing. These are negative to domestic soybean market. In a hybrid of the bull and the bear, short-term domestic soybean prices will maintain a strengthening trend in fluctuation on bullish factors.

 

Imported soybean: Domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans, and port shipments have been constrained by strict commodity inspections. Moreover, U.S. democratic candidate Joe Biden won the presidential election, which will make for a detente in relations between China and the US. China is still fulfilling phase-one trade deal, and also continues purchasing forward Brazilian soybeans due to handsome crush margins, which will add to supplies in the market. However, imported soybean supplies are still limited at ports now, which helps limit price declines. Overall, short-term imported soybean market is predicted to keep steady. Participants can continue focusing on imported soybean arrivals and demand in China.

 

China's Soybean Weekly Price（CNY/Tonne）
Region		Grade	This week	Last week	Variation
Northeast China	Heilongjiang	Domestic, GB Grade 3	5300	5240	60
	Inner Mongolia	Domestic, GB Grade 3	5240	5740	-500
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	6900	6900	0
	Shandong	Imported, Argentina	N/A	N/A
		Imported, Brazil	4750	N/A
		Imported, Uruguay	4900-4950	4980	30-80
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	5300	5240	60
		Imported soybean	4140	4160	-20

 

 

 

 

Crush: Domestic crushers lower down operation rates this week (Nov 14-20), as they have to halt or reduce production under swelling meal inventories. Soybean crush at domestic mills totals 2,035,680 tonnes (meal 1,608,187 tonnes and oil 386,779 tonnes), down 84,400 tonnes or 3.98% from 2,120,080 tonnes last week. Meanwhile, operation rates (capacity utilization) are 58.14%, down 2.41% from 60.55% in the previous week. As mills have a plan for downtime due to ballooning meal stockpiles and toward the month end, soybean crush is expected to fall further to 2 mln tonnes and 1.98 mln tonnes in the next two weeks, respectively.

 

Soybean crush nationwide is estimated at 8.84 mln tonnes in November at current utilization rate, above than 8.3883 mln tonnes in the previous month and 7.1261 mln tonnes of the corresponding period last year.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 14,553,184 tonnes, up 2,612,934 tonnes or 21.88% from 11,940,250 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 84,159,870 tonnes, up 10,177,935 tonnes or 13.76% from 73,981,935 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean stocks are lower this week as soybean crush remains above 2 mln tonnes, coupled with fewer cargoes into the factory. In the week as of Nov 20, China’s imported soybean stocks in coastal regions total 5,674,500 tonnes, down 389,900 tonnes by 6.44% from 6,064,400 tonnes last week and up by 91.07% from 2,969,800 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 33 cargoes with 2.174 mln tonnes this week, a total of 87 cargoes with 5.636 mln tonnes for November so far. The import is predicted to be 133 cargoes or 9.149 mln tonnes for November, 9.1 mln tonnes for December, and 8 mln tonnes for January, 6.3 mln tonnes for February and 6.5 mln tonnes for March.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices first decline and then rise this week (Nov 16-20). As of this Friday, prices fluctuate by 10-50 CNY to 3,110-3,230 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,340	3,350	-10
North China	Tianjin	3,240	3,230	10
	Hebei	3,240	3,230	10
Central China	Hubei	3,210	3,200	10
	Henan	3,330	3,330	0
East China	Shandong	3,170	3,160	10
	Jiangsu	3,120	3,130	-10
	Zhejiang	3,190	3,135	55
	Shanghai	3,150	3,150	0
	Fujian	3,200	3,170	30
	Anhui	3,180	3,140	40
South China	Guangdong	3,130	3,080	50
	Guangxi	3,210	3,180	30
National average		3,179	3,172	7

 

 

Inventory: Soybean meal stocks continue increasing this week as there is a decline in delivery. In the week as of Nov 20, China’s soybean meal stocks in coastal regions are 1,002,400 tonnes, up 132,100 tonnes by 15.18% from 870,300 tonnes last week and up by 169.97% from 371,300 tonnes of the corresponding period last year. As weekly soybean crush will further decline in the next two weeks, soybean meal stocks are likely to slow down rises.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices climb for a fourth consecutive week this week (Nov 16-20). As of this Friday, the price for GB Grade I settles at 8,260-8,280 CNY/tonne in domestic coastal regions, a rise of 280-480 CNY/tonne. The overall nationwide price index moves to 8,270 CNY/tonne, a weekly rise of 320 CNY or 4.03% from 7,950 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	8,270	7980-8010	260-290
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,250	7,950	300
		GB Grade 3	8,150	7,850	300
	Tianjin	GB Grade 1	8,260	7,910	350
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,280	7,960	320
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	8,270	7,990	280
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,270	7,950	320
		GB Grade 3	8,220	7,945	275

 

 

Inventory: Soybean oil stocks continue reducing this week due to less output under lower soybean crush, but the decline is smaller than in previous weeks. In the week ending Nov 20, China’s soybean oil commercial inventories total 1,175,800 tonnes, down 3,300 tonnes by 0.28% from 1,179,100 tonnes last week, down 104,200 tonnes by 8.14% from 1,280,000 tonnes a month earlier, and up 90,000 tonnes by 8.29% from 1,085,800 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,312,900 tonnes.