I. Soybean

 

Price

 

Domestic soybean: Downstream buyers are busy making replenishment for the Chinese Lunar New Year, lending further support to soybean prices. Transportation has been interrupted by cold waves that hit portions of soybean producing regions and covered roads with snow and ice, and transportation cost has also risen as it is difficult to find trucks when many regions are implementing containment measures due to the pandemic in northern China; hence, soybean prices are bolstered in producing regions. Meanwhile, the supply of high-quality soybeans is in shortage due to a sharp production reduction in regions like Jiangsu and Anhui provinces. Hence, domestic soybean market is in tight supplies. Moreover, 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. And the demand for bean products turned disperse as schools, companies and construction units take a holiday, which will also curb rise in soybean prices. In the short term, imported soybean market is predicted to keep an uptrend in fluctuation on bullish factors.

 

Imported soybean: The overall supply of imported soybeans are small with only 15,000 tonnes at Shandong ports, coupled with routine commodity inspections at ports, so the supply gets tense in the market. Meanwhile, U.S. soybean futures broke the 1,430 cents level to hit the highest in six and a half years as the USDA January report was bullish and on concerns over dry weather in South America. As a result, soybean import cost keeps rallying in China. And 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. 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	5240	5560	-320
	Inner Mongolia	Domestic, GB Grade 3	5520	5500	20
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7300	7060	240
	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	5240	5560	-320
		Imported soybean	4790	4470	320

 

 

 

 

Crush: Operation rates for soybean crush pick up as expected this week (Jan 9-15). Crush margins are profitable in the wake of rises in both futures and spot prices, and due to robust soybean meal trade after sharp price rises, its inventory is getting tight in northern China while swollen inventory has eased among southern mills who have shipped their cargoes to northern markets. Soybean crush at domestic mills totals 1,981,980 tonnes (meal 1,565,764 tonnes and oil 376,576 tonnes), up 297,400 tonnes or 17.65% from 1,684,580 tonnes last week. Meanwhile, operation rates (capacity utilization) are 55.89%, up 7.78% from 48.11% in the previous week. As operation rates will continue rising in the coming two weeks, soybean crush is predicted to be about 2 mln tonnes next week (week 3) and 2.05 mln tonnes in week 4.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 29,401,624 tonnes, up 2,468,824 tonnes or 9.17% from 26,932,800 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 3,910,686 tonnes, down 988,471 tonnes or 20.18% from 4,899,157 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks continue increasing this week as more cargoes put into mills, but the increment is smaller as soybean crush picks up to 1.98 mln tonnes. In the week as of Jan 15, China’s imported soybean stocks in coastal regions total 5,281,300 tonnes, up 30,200 tonnes by 0.58% from 5,251,100 tonnes last week and up by 34.61% from 3,923,400 tonnes year over year.  

 

 

Arrivals and the outlook: According to Cofeed, soybean import is predicted to be 124 cargoes or 8.156 mln tonnes for January, 7 mln tonnes for February, 6.5 mln tonnes for March and 8.1 mln tonnes for April and 10 mln tonnes for May.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices continue an uptrend and expand rises this week (Jan 11-15). As of this Friday, prices settle up 360-490 CNY to 3,800-4,150 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	4,400	3,870	530
North China	Tianjin	4,150	3,650	500
	Hebei	4,160	3,670	490
Central China	Hubei	4,090	3,600	490
	Henan	4,150	3,660	490
East China	Shandong	4,080	3,600	480
	Jiangsu	3,980	3,550	430
	Zhejiang	3,980	3,560	420
	Shanghai	3,970	3,530	440
	Fujian	3,940	3,540	400
	Anhui	4,080	3,590	490
South China	Guangdong	3,830	3,490	340
	Guangxi	3,800	3,500	300
National average		4,017	3,577	440

 

 

Inventory: Sharp rises in soybean meal prices stimulated the market to welcome robust trade for a second straight week, and mid-and-downstream buyers bring forward their schedule to stock up for the Chinese Lunar New Year with concerns that the the pandemic could affect the logistics; hence, soybean meal stocks are further lower in China this week. In the week as of Jan 15, China’s soybean meal stocks in coastal regions are 623,600 tonnes, down 180,100 tonnes by 22.41% from 803,700 tonnes last week and up by 5.03% from 593,700 tonnes a year earlier. As weekly soybean crush will further pick up to 2 mln tonnes in coming two weeks and downstream buyers are more cautious at current high prices in soybean meal market, soybean meal inventory is expected to slow down the decline.

 

 

III. Soybean Oil

 

Price: This week (Jan 11-15), domestic soybean oil prices sharply decline. As of this Friday, the price for GB Grade I settles at 8,420-8,820 CNY/tonne in domestic coastal regions, a decline of 280-460 CNY/tonne. The overall nationwide price index is 8,640 CNY/tonne, a weekly decline of 380 CNY or 4.2% from 9,020 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	8,820	9,100	-280
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	N/A	8,950
		GB Grade 3	N/A	8,850
	Tianjin	GB Grade 1	8,420	8,880	-460
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,500	8,880	-380
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	N/A	9,150
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,640	9,020	-380
		GB Grade 3	8,590	8,970	-380

 

 

Inventory: Soybean oil stocks further decline this week albeit a rise in soybean crush. Spot soybean oil is still tight in some regions, and some oil mills have a huge amount of outstanding contracts. In the week ending Jan 15, China’s soybean oil commercial inventories total 848,000 tonnes, down 36,350 tonnes by 4.11% from 884,350 tonnes last week, down 182,000 tonnes by 17.67% from 1,030,000 tonnes month on month, and down 29,500 tonnes by 3.36% from 877,500 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,146,000 tonnes.