I. Soybean

 

Price

 

Domestic soybean: Soybean futures post an uptrend as investors outside the industry take along funds into the market, and this has fostered bullish sentiment in the spot market and soybean holders grow stronger sentiment to support 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. Meanwhile, downstream buyers are actively stocking up for the Chinese Lunar New Year, which also further harden support in soybean prices. Besides, domestic soybean is taking up more share in the wake of a rise in imported soybean prices, which is also positive to the 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. In addition, some middle and small-sized bean products manufacturers are faced with crisis due to stubbornly high soybean prices, so that some of them have to suspend production and some choose to  buy on immediate demand. In the short term, domestic soybean market is predicted to go upward in fluctuation on bullish factors.

 

Imported soybean: The overall supply of imported soybeans are small at ports, and port operations in Shandong are limited under the influence of 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, soybean production in South America is still uncertain, and more than 170 cargo ships were kept from loading agricultural goods in Argentina during a 20-day strike, which raised U.S. soybean prices to soar. The cost of importing soybeans thus stays at a high level, which also bolsters imported soybean market in China. Besides, 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, China has substantially imported U.S. soybeans to fulfill phase-one trade deal, so that soybean cargoes arriving at domestic ports may see an increase, which is limiting the rise in imported soybean prices. In the short term, imported soybean market will probably keep firm on bullish factors. 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	5520	5500	20
	Inner Mongolia	Domestic, GB Grade 3	5400	5360	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	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	5520	5500	20
		Imported soybean	4300	4250	50

 

 

Crush: This week (Dec 26, 2020-Jan 1, 2021), operation rates in soybean oil mills continue falling at a pace sharper than the forecast due to swollen meal inventories, especially in southern regions. Soybean crush at domestic mills totals 1,708,880 tonnes (meal 1,350,015 tonnes and oil 324,687 tonnes), down 173,200 tonnes or 9.2% from 1,882,080 tonnes last week. Meanwhile, operation rates (capacity utilization) are 48.81%, down 4.94% from 53.75% in the previous week. With easing meal stockpiles, soybean crush is expected to rise to around 1.83 mln tonnes next week and to nearly 2 mln tonnes in the following week.

 

Soybean crush nationwide is estimated at 8.34 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 25,735,064 tonnes, up 2,844,064 tonnes or 12.42% from 22,891,000 tonnes a year earlier.

 

In the calendar year of 2020 (from Jan. 1st, 2020), China’s soybean crush amounts to 95,341,750 tonnes, up 10,409,065 tonnes or 12.26% from 84,932,685 tonnes of the corresponding period in 2019.

 

 

Inventory: Soybean stocks are lower this week due to smaller imported cargoes put into warehouses. In the week as of Jan 1, China’s imported soybean stocks in coastal regions total 5,141,400 tonnes, down 388,800 tonnes by 7.03% from 5,530,200 tonnes last week and up by 26.34% 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 climb higher this week (Dec 28-31). As of this Thursday, prices settle up 120-190 CNY to 3,300-3,450 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,640	3,470	170
North China	Tianjin	3,470	3,280	190
	Hebei	3,470	3,280	190
Central China	Hubei	3,440	3,250	190
	Henan	3,500	3,300	200
East China	Shandong	3,380	3,250	130
	Jiangsu	3,380	3,170	210
	Zhejiang	3,400	3,200	200
	Shanghai	3,380	3,200	180
	Fujian	3,400	3,280	120
	Anhui	3,400	3,240	160
South China	Guangdong	3,350	3,150	200
	Guangxi	3,390	3,210	180
National average		3,407	3,231	176

 

 

Inventory: Soybean meal stocks increase marginally this week due to slow shipments under sluggish terminal consumption. In the week as of Jan 1, China’s soybean meal stocks in coastal regions are 860,100 tonnes, up 14,900 tonnes by 1.76% from 845,200 tonnes last week and up by 65.30% from 520,300 tonnes of the corresponding period last year. Soybean meal stocks are likely to keep increasing slightly under slow shipments.

  

 

III. Soybean Oil

 

Price: This week (Dec 28-31), domestic soybean oil prices first decline and then rise, with an overall fall from last week. As of this Thursday, the price for GB Grade I settles at 8,690-8,890 CNY/tonne in domestic coastal regions, a partial decline of 30-50 CNY/tonne. The overall nationwide price index is 8,800 CNY/tonne, a weekly drop of 30 CNY or 0.23% from 8,820 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	8,890	8,920	-30
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,650	8,700	-50
		GB Grade 3	8,550	8,600	-50
	Tianjin	GB Grade 1	8,690	8740-8760	50-70
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,700	N/A
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	N/A	8,880
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,800	8,770	30
		GB Grade 3	8,750	8,720	30

 

 

Inventory: Soybean oil stocks further reduce this week, as soybean crush fell more than the forecast. In the week ending Jan 1, China’s soybean oil commercial inventories total 958,350 tonnes, down 44,500 tonnes by 4.44% from 1,002,850 tonnes last week, and down 166,650 tonnes by 14.81% from 1,125,000 tonnes a month earlier.