I. Soybean

 

Price

 

Domestic soybean: Farmers in domestic producing regions still have sentiment to stall soybean sales for higher prices. And recent rain and snow in northeast China have been slowing down stock release and led to a rise in freight, in addition to a sharp reduction in soybean production around Jiangsu Province and a highlight in soybean price and quality. On the demand side, large soybean deep-processing enterprises have started to stock up soybeans for holidays, and buyers turn to domestic soybean market due to a rise in imported soybean prices. These are supporting domestic soybean market. However, some traders now have an intention to book profits to recoup funds toward the end of the year, so their prices have become loose. Besides, some middle and small-sized bean products manufacturers have little appetite for high-priced soybeans and slow down purchases to save cost, and some have even suspend production, which is bearish to the market. In the short term, domestic soybean market is predicted to go upward in fluctuation on bullish factors.

 

Imported soybean: Imported soybeans for distribution only total 40,000 tonnes at ports in Shangdong and Nantong, and port operations come to a standstill in Rizhao, Shandong subject to the environmental protection, in addition to routine commodity inspections in other ports, so the supply gets tense in the market and prices continue rising this week. Meanwhile, Russia announced to impose 30% of export tariff on soybeans from Feb 1 to Jun 30 next year, so China’s imports of Russian soybeans may reduce, which is also supporting the imported soybean market. However, soybean arrivals from the U.S. are increasing, and buyers are less enthusiastic in the wake of a rise in price, which are bearish to the imported soybean market in China. In a hybrid of the bull and the bear, imported soybean market will probably keep firm in the short term. Participants can keep an eye 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	5500	5400	100
	Inner Mongolia	Domestic, GB Grade 3	5360	5200	160
	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	N/A	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	5500	5400	100
		Imported soybean	4250	4050	200

 

 

 

 

Crush: As some oil mills stay in downtime subject to the environmental protection in Shandong and some suspend or limit production under swelling meal inventory in Guangdong and Guangxi, operation rates for soybeans decline as expected this week (Dec 19-25). The decline even goes beyond the forecast as the downtime is long due to severe air pollution in Rizhao, Shandong Province. Soybean crush at domestic mills totals 1,882,080 tonnes (meal 1,486,843 tonnes and oil 357,595 tonnes), down 125,100 tonnes or 6.23% from 2,007,180 tonnes last week. Meanwhile, operation rates (capacity utilization) are 53.75%, down 3.58% from 57.33% in the previous week. Soybean crush is predicted to be 1.82 mln tonnes and near 2.0 mln tonnes in the coming two weeks, respectively.

 

Soybean crush nationwide is estimated at 8.44 mln tonnes in December at current utilization rate, lower than 8.543 mln tonnes in the previous month but higher than 8.1008 mln tonnes of the corresponding period last year.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 24,026,184 tonnes, up 3,135,684 tonnes or 15.01% from 20,890,500 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 93,632,870 tonnes, up 10,700,685 tonnes or 12.9% from 82,932,185 tonnes of the corresponding period in 2019.

 

 

Inventory: Soybean stocks pick up this week, as soybean crush fell as expected due to long downtime in Rizhao under heavy air pollution. In the week as of Dec 25, China’s imported soybean stocks in coastal regions total 5,530,200 tonnes, up 189,800 tonnes by 3.55% from 5,340,400 tonnes last week and up by 35.90% from 4,069,200 tonnes of the same period last year. Domestic soybean stocks usually decreased gradually from September in previous years, but China has purchased many 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 import is predicted to be 142 cargoes or 9.328 mln tonnes for December, 8 mln tonnes for January, 6.3 mln tonnes for February, 6.5 mln tonnes for March and 8.1 mln tonnes for April.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices first rise and then decline this week (Dec 21-25). As of this Friday, prices settle up 100-130 CNY to 3,140-3,270 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,470	3,360	110
North China	Tianjin	3,280	3,180	100
	Hebei	3,280	3,180	100
Central China	Hubei	3,250	3,140	110
	Henan	3,300	3,230	70
East China	Shandong	3,250	3,140	110
	Jiangsu	3,170	3,085	85
	Zhejiang	3,200	3,085	115
	Shanghai	3,200	3,090	110
	Fujian	3,280	3,140	140
	Anhui	3,240	3,120	120
South China	Guangdong	3,150	3,050	100
	Guangxi	3,210	3,130	80
National average		3,231	3,133	98

 

 

Inventory: Soybean meal stocks decline as its output reduces under lower soybean crush. In the week as of Dec 25, China’s soybean meal stocks in coastal regions are 845,200 tonnes, down 10,700 tonnes by 1.25% from 855,900 tonnes last week and up by 62.44% from 520,300 tonnes of the corresponding period last year. As soybean crush is expected to stay at 1.82 mln tonnes next week, soybean meal stocks are likely to keep reducing marginally.

 

III. Soybean Oil

 

Price: This week (Dec 21-25), domestic soybean oil prices first decline and then rise. As of this Friday, the price for GB Grade I settles at 8,700-8,920 CNY/tonne in domestic coastal regions, a rise of 100-200 CNY/tonne. The overall nationwide price index is 8,820 CNY/tonne, a weekly rise of 140 CNY or 1.61% from 8,680 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	8,920	8620-8650	270-300
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,700	8,600	100
		GB Grade 3	8,600	8,500	100
	Tianjin	GB Grade 1	8740-8760	8620-8650	110-120
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	N/A	8,600
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	8,880	8720-8770	110-160
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,770	8,640	130
		GB Grade 3	8,720	8,600	120

 

 

Inventory: Soybean oil stocks further reduce this week, as soybean crush fell as expected. In the week ending Dec 25, China’s soybean oil commercial inventories total 1,002,850 tonnes, down 17,850 tonnes by 1.75% from 1,020,700 tonnes last week, down 157,150 tonnes by 13.55% from 1,160,000 tonnes a month earlier, and up 86,120 tonnes by 9.39% from 916,730 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,214,500 tonnes.