I. Soybean

 

Price

 

Domestic soybean: In the context of a sustained rises in inflation and a global focus on food security, traders and farmers are bullish about the soybean market prospect and have strong sentiment in propping up prices, so that purchasers have to raise their bid. Besides, widespread 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, which is underpinning domestic soybean market. However, middle and small-sized been products manufacturers have little appetite for high-priced soybeans and slow down purchases to save cost, and some have even suspend production. Add to that, some purchasers may turn to imported soybean market as China continues importing soybeans, which is bearish 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.

 

Imported soybean: Local authorities have loosened commodity inspection at Shandong ports, according to market talks. And domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans, which is negative to the market. Meanwhile, China is still fulfilling phase-one trade deal, with 6-8 vessels at PNW bought last week and 1 vessel for Jan shipment at U.S. Gulf this week. And its appetite for new Brazilian soybeans remains due to healthy crush margins for forward contracts, with vessels for July shipment bought this week. These will add to the supply in domestic 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	5580	5400	180
	Inner Mongolia	Domestic, GB Grade 3	5440	5360	80
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	6900	6900	0
	Shandong	Imported, Argentina	N/A	N/A
		Imported, Brazil	4700-4750	4750	-50
		Imported, Uruguay	N/A	4900-4950
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	5580	5400	180
		Imported soybean	4060	4140	-80

 

 

 

 

Crush: As soybean meal pressure is not abating and mills in Rizhao, Shandong Province are required by local environmental authorities to cut down production under heavy pollution, operation rates for soybean crush declines as expected this week (Nov 28-Dec 4). Soybean crush at domestic mills totals 1,789,680 tonnes (meal 1,413,847 tonnes and oil 340,039 tonnes), down 53,600 tonnes or 2.9% from 1,843,280 tonnes last week. Meanwhile, operation rates (capacity utilization) are 51.11%, down 1.53% from 52.64% in the previous week. Soybean crush will rise again to 1.95 mln tonnes and 1.95 mln tonnes in the coming two weeks, respectively.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 18,186,144 tonnes, up 2,817,944 tonnes or 18.34% from 15,368,200 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 87,792,830 tonnes, up 10,382,945 tonnes or 13.41% from 77,409,885 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean stocks mount higher this week as soybean crush continues falling to 1.78 mln tonnes due to swelling meal inventories. In the week as of Dec 4, China’s imported soybean stocks in coastal regions total 5,493,700 tonnes, up 350,800 tonnes by 6.82% from 5,142,900 tonnes last week and up by 65.44% from 3,320,600 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 arrivals are 22 cargoes with 1.471 mln tonnes this week, a total of 14 cargoes with 939,000 tonnes for December so far. The 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 7.2 mln tonnes for April.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices fluctuate to decline this week (Nov 30-Dec 4). As of this Friday, prices settle down 70-100 CNY to 2,990-3,120 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,270	3,330	-60
North China	Tianjin	3,130	3,220	-90
	Hebei	3,130	3,220	-90
Central China	Hubei	3,060	3,160	-100
	Henan	3,140	3,260	-120
East China	Shandong	3,050	3,140	-90
	Jiangsu	3,015	3,085	-70
	Zhejiang	3,020	3,130	-110
	Shanghai	3,070	3,110	-40
	Fujian	3,070	3,150	-80
	Anhui	3,040	3,140	-100
South China	Guangdong	2,990	3,080	-90
	Guangxi	3,060	3,160	-100
National average		3,066	3,147	-81

 

 

Inventory: Soybean meal stocks continue decreasing this week owing to a further decline in soybean crush. In the week as of Dec 4, China’s soybean meal stocks in coastal regions are 838,900 tonnes, down 85,500 tonnes by 9.25% from 924,400 tonnes last week and up by 98.36% from 422,900 tonnes of the corresponding period last year. As soybean crush will pick up to 1.95 mln tonnes next week, soybean meal stocks are likely to slow down declines correspondingly.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices first decline and then rise in fluctuation week this week (Nov 30-Dec 4). As of this Friday, the price for GB Grade I settles at 8,290-8,410 CNY/tonne in domestic coastal regions, a rise of 150-250 CNY/tonne. The overall nationwide price index moves to 8,330 CNY/tonne, a weekly rise of 200 CNY or 2.46% from 8,130 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	8,340	8,110	230
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,300	8,150	150
		GB Grade 3	8,200	8,050	150
	Tianjin	GB Grade 1	8290-8300	8,160	130-140
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,300	8,150	150
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	8,410	8,160	250
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,330	8,130	200
		GB Grade 3	8,280	8,080	200

 

 

Inventory: Soybean oil stocks further decline this week due to smaller output under lower soybean crush. In the week ending Dec 4, China’s soybean oil commercial inventories total 1,079,290 tonnes, down 71,710 tonnes by 6.23% from 1,151,000 tonnes last week, down 150,710 tonnes by 12.25% from 1,230,000 tonnes a month earlier, and up 82,940 tonnes by 8.32% from 996,350 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,282,600 tonnes.