I. Soybean

 

Price

 

Domestic soybean: On the demand side, 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. On the supply side, traders in the spot market become active in making shipments after No.1 soybean futures pared previous gains, and imported soybeans are in huge supplies and favorable prices, which enable them to occupy domestic soybean share. These are 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. As buyers and sellers are in a stalemate, short-term soybean market is predicted to steady with a weakening trend.

 

Imported soybean: As traders have sold out imported soybeans of lower prices this week, and the overall imported soybean supplies are limited at ports with less than 60,000 tonnes together in Shandong and Nantong; hence, imported soybean prices are marginally higher this week. However, commodity inspection has been loosened at Shandong ports, which will help increase imported soybean supply. Moreover, China was buying up on U.S. soybeans previously, so the arrivals will be increasing. And in the week ending Dec 10, China bought 919,700 tonnes of U.S. soybeans, according to the release by the USDA. This will also add to the supply in domestic market. Besides, domestic customers are not active in buying imported soybeans at present, which is also bearish to the market. On the whole, as the supply gets increasing, short-term imported soybean market may steady with a weakening trend. 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	5400	5500	-100
	Inner Mongolia	Domestic, GB Grade 3	5200	5400	-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	4600
		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	5400	5500	-100
		Imported soybean	4050	4020	30

 

 

 

 

Crush: Oil mills across the country are trying to maintain production in order to meet strong demand for soybean oil, though some mills have limited the crushing in Shandong Province; hence, operation rates continue rising this week (Dec 12-18). Soybean crush at domestic mills totals 2,007,180 tonnes (meal 1,585,672 tonnes and oil 381,364 tonnes), up 56,400 tonnes or 2.89% from 1,950,780 tonnes last week. Meanwhile, operation rates (capacity utilization) are 57.33%, up 1.62% from 55.71% in the previous week. Soybean crush is predicted to be 1.95 mln tonnes and 2.08 mln tonnes in the coming two weeks, respectively.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 22,144,104 tonnes, up 3,252,404 tonnes or 17.22% from 18,891,700 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 91,750,790 tonnes, up 10,817,405 tonnes or 12.86% from 80,933,385 tonnes of the corresponding period in 2019.

 

 

Inventory: Imported soybean stocks continue decreasing this week, as soybean crush climbs further to 2 mln tonnes when oil mills work to maintain high operation rates to meet strong soybean oil demand. In the week as of Dec 18, China’s imported soybean stocks in coastal regions total 5,340,400 tonnes, down 146,000 tonnes by 2.66% from 5,486,400 tonnes last week and up by 43.58% from 3,719,300 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 bounce this week (Dec 14-18). As of this Friday, prices settle up 70-110 CNY to 3,040-3,180 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,360	3,280	80
North China	Tianjin	3,180	3,100	80
	Hebei	3,180	3,100	80
Central China	Hubei	3,140	3,030	110
	Henan	3,230	3,130	100
East China	Shandong	3,140	3,030	110
	Jiangsu	3,085	2,985	100
	Zhejiang	3,085	3,000	85
	Shanghai	3,090	3,020	70
	Fujian	3,140	3,050	90
	Anhui	3,120	3,030	90
South China	Guangdong	3,050	2,980	70
	Guangxi	3,130	3,040	90
National average		3,133	3,043	90

 

 

Inventory: Soybean meal stocks decrease this week due to quicker meal delivery, but the decline is small under high soybean crush. In the week as of Dec 18, China’s soybean meal stocks in coastal regions are 855,900 tonnes, down 30,400 tonnes by 3.43% from 886,300 tonnes last week and up by 96.39% from 435,800 tonnes of the corresponding period last year. As soybean crush will marginally drop to 1.95 mln tonnes next week, soybean meal stocks are likely to keep reducing.

 

 

III. Soybean Oil

 

Price: This week (Dec 14-18), domestic soybean oil prices follow futures to post sharp gains and to hit a fresh high for this year. As of this Friday, the price for GB Grade I settles at 8,600-8,770 CNY/tonne in domestic coastal regions, a rise of 300-400 CNY/tonne. The overall nationwide price index is 8,680 CNY/tonne, a weekly rise of 380 CNY or 4.58% from 8,300 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	8620-8650	8290-8300	330-350
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,600	8,300	300
		GB Grade 3	8,500	8,200	300
	Tianjin	GB Grade 1	8620-8650	8250-8260	370-390
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,600	8,300	300
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	8720-8770	8,350	370-420
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,640	8,300	340
		GB Grade 3	8,600	8,250	350

 

 

Inventory: Soybean oil stocks keep declining this week albeit a further pickup in soybean crush, but the decline is notably smaller. In the week ending Dec 18, China’s soybean oil commercial inventories total 1,020,700 tonnes, down 15,450 tonnes by 1.49% from 1,036,150 tonnes last week, down 157,300 tonnes by 13.35% from 1,178,000 tonnes a month earlier, and up 119,800 tonnes by 13.30% from 900,900 tonnes of the corresponding period last year. And the five-year (2015-2019) average at the same period is 1,213,800 tonnes.