I. Soybean

 

Price

 

Domestic soybean: Spot soybean market lost its guidance as No.1 soybean futures fell in the wake of sharp gains. And 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. Hence, some traders feel less confident in propping up prices under lukewarm trade and are active in making shipments. In addition, soybean arrivals are enormous at ports, and imported soybean takes its own price advantage to grab market share, which is also bearish to domestic soybean market. However, domestic consumer demand for soybean products is increasing notably toward the end of the year, and some soybean deep-processing enterprises have a plan to make soybean replenishment. 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. In a hybrid of the bull and the bear, short-term domestic soybean prices will steady in fluctuation..

 

Imported soybean: Soybean arrivals at domestic ports have been substantial as China was actively buying up on U.S. soybeans. China’s November soybean imports rose 10.2% month over month, according to data to Customs. Moreover, commodity inspection has been loosened at Shandong ports, which will also help increase imported soybean supply. But domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans, which is bearish to the market. Meanwhile, China is still fulfilling the phase-one trade deal, and has purchased 685,400 tonnes of U.S. soybeans in the week as of Dec 3, according to the USDA report. This will also add to the supply in domestic market. Overall, short-term imported soybean market is predicted to steady with a weakening trend following an increase in supply. 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	5500	5580	-80
	Inner Mongolia	Domestic, GB Grade 3	5400	5440	-40
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	6900	6900	0
	Shandong	Imported, Argentina	N/A	N/A
		Imported, Brazil	4600	4700-4750	100-150
		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	5580	-80
		Imported soybean	4020	4060	-40

 

 

 

 

Crush: Domestic crushers have elevated operation rates as expected this week (Dec 5-11), so soybean crush at domestic mills totals 1,950,780 tonnes (meal 1,541,116 tonnes and oil 370,648 tonnes), up 161,100 tonnes or 9.0% from 1,789,680 tonnes last week. Meanwhile, operation rates (capacity utilization) are 55.71%, up 4.6% from 51.11% in the previous week. Soybean crush will continue rising to 1.97 mln tonnes and 2.06 mln tonnes in the coming two weeks, respectively.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 20,136,924 tonnes, up 3,101,724 tonnes or 18.20% from 17,035,200 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 89,743,610 tonnes, up 10,666,725 tonnes or 13.48% from 79,076,885 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean stocks reduce this week as soybean crush rises as expected to 1.95 mln tonnes. In the week as of Dec 11, China’s imported soybean stocks in coastal regions total 5,486,400 tonnes, down 7,300 tonnes by 0.13% from 5,493,700 tonnes last week and up by 64.82% from 3,328,600 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 31 cargoes with 2.037 mln tonnes this week, a total of 44 cargoes with 2.91 mln 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 8.1 mln tonnes for April.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices fluctuate to decline this week (Dec 7-11). As of this Friday, prices settle down 10-30 CNY to 2,980-3,100 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,280	3,270	10
North China	Tianjin	3,100	3,130	-30
	Hebei	3,100	3,130	-30
Central China	Hubei	3,030	3,060	-30
	Henan	3,130	3,140	-10
East China	Shandong	3,030	3,050	-20
	Jiangsu	2,985	3,015	-30
	Zhejiang	3,000	3,020	-20
	Shanghai	3,020	3,070	-50
	Fujian	3,050	3,070	-20
	Anhui	3,030	3,040	-10
South China	Guangdong	2,980	2,990	-10
	Guangxi	3,040	3,060	-20
National average		3,043	3,066	-23

 

 

Inventory: Soybean meal stocks increase again this week due to slow meal delivery and a rise in soybean crush. In the week as of Dec 11, China’s soybean meal stocks in coastal regions are 886,300 tonnes, up 47,400 tonnes by 5.65% from 838,900 tonnes last week and up by 126.09% from 392,000 tonnes of the corresponding period last year. As soybean crush will pick up to 1.97 mln tonnes next week, soybean meal stocks are likely to keep growing correspondingly.

 

 

III. Soybean Oil

 

Price: This week (Dec 4-11), domestic soybean oil prices fluctuate to decline in the first four days, and recover most losses on Friday. As of this Friday, the price for GB Grade I settles at 8,250-8,350 CNY/tonne in domestic coastal regions, a decline of 20-60 CNY/tonne. The overall nationwide price index is 8,300 CNY/tonne, a weekly decline of 30 CNY or 0.36% from 8,330 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	8290-8300	8,340	40-50
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,300	8,300	0
		GB Grade 3	8,200	8,200	0
	Tianjin	GB Grade 1	8250-8260	8290-8300	40
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,300	8,300	0
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	8,350	8,410	-60
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,300	8,330	-30
		GB Grade 3	8,250	8,280	-30

 

 

Inventory: Soybean oil stocks keep declining albeit a pickup in soybean crush. Spot soybean oil market is in tightening supply and domestic consumer demand for packaging oils remains decent ahead of the holidays, whilst mills in Rizhao all suspended production last Friday due to the environmental protection. In the week ending Dec 11, China’s soybean oil commercial inventories total 1,036,150 tonnes, down 43,140 tonnes by 4% from 1,079,290 tonnes last week, down 143,850 tonnes by 12.19% from 1,180,000 tonnes a month earlier, and up 85,700 tonnes by 9.02% from 950,450 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,257,200 tonnes.