I. Soybean

 

Price

 

Domestic soybean: Chinese farmers have sold about 80 percent of soybeans, and they are stalling sales on reducing surplus and on bullish sentiment toward the market. Containment measures against the COVID-19 are escalating, leading to some restrictions on roads, so that transportation cost is soaring. Terminals consumers are stocking up at a brisk pace with fear of possible lockdown around of the Chinese Lunar New Year, thus pushing higher spot trading prices for domestic soybeans. Meanwhile, the supply of high-quality soybeans is in shortage due to a sharp production reduction in regions like Jiangsu and Anhui provinces, so 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. 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 and the supply gets tense in the market due to limited shipments, which combine to bolster imported soybean prices. Meanwhile, U.S. soybean prices remain high so that import cost also stay at high levels 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. But nearly 10,000 tonnes of imported soybeans has been unloaded at Tianjin port this week, and China is still purchasing U.S. soybeans briskly, which is limiting rises in imported soybean prices in China. In the short term, imported soybean market will probably keep strengthening 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	5740	5240	500
	Inner Mongolia	Domestic, GB Grade 3	5620	5520	100
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7700	7300	400
	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	5550	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	5740	5240	500
		Imported soybean	4840	4790	50

 

 

 

 

Crush: Chinese crushers continue speeding up operation rates for soybeans this week (Jan 16-22, 2021) due to decent crush margins and as downstream buyers are taking delivery at a brisk pace. Soybean crush at domestic mills totals 2,107,620 tonnes (meal 1,665,020 tonnes and oil 400,448 tonnes), up 125640 tonnes or 6.3% from 1,981,980 tonnes last week. Meanwhile, operation rates (capacity utilization) are 59.43%, up 3.54% from 55.89% in the previous week. As operation rates will remain high in the next two weeks, soybean crush is forecast to stay at 2.1 mln tonnes next week but fall to 2.05 mln tonnes that following week with the coming of the Chinese Lunar New Year.

 

Soybean crush nationwide is estimated at 8.75 mln tonnes in January at current utilization rate, higher than the 8.4225 mln tonnes in the previous month and also higher than 5.913 mln tonnes of the corresponding period last year (Holidays for Chinese Lunar New Year last year were during the last ten days of January).

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 31,509,244 tonnes, up 3,634,444 tonnes or 13.04% from 27,874,800 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 6,018,306 tonnes, up 177,149 tonnes or 3.03% from 5,841,157 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks are lower this week as soybean crush drastically picks up to 2.1 mln tonnes. In the week as of Jan 22, China’s imported soybean stocks in coastal regions total 4,841,600 tonnes, down 439,700 tonnes by 8.33% from 5,281,300 tonnes last week but up by 37.26% from 3,527,200 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 retreat this week (Jan 18-22). As of this Friday, prices settle down 150-290 CNY to 3,540-3,980 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Liaoning	4,230	4,400	-170
North China	Tianjin	3,980	4,150	-170
	Hebei	4,000	4,160	-160
Central China	Hubei	3,900	4,090	-190
	Henan	3,880	4,150	-270
East China	Shandong	3,850	4,080	-230
	Jiangsu	3,750	3,980	-230
	Zhejiang	3,780	3,980	-200
	Shanghai	3,750	3,970	-220
	Fujian	3,800	3,940	-140
	Anhui	3,940	4,080	-140
South China	Guangdong	3,600	3,830	-230
	Guangxi	3,650	3,800	-150
National average		3,824	4,017	-193

 

 

Inventory: Soybean meal stocks continue reducing this week on brisk delivery and as 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. In the week as of Jan 22, China’s soybean meal stocks in coastal regions are 482,000 tonnes, down 141,600 tonnes by 22.71% from 623,600 tonnes last week and up 2.70% from 469,300 tonnes a year earlier. As weekly soybean crush will stay high at 2.1 mln tonnes next week and downstream buyers are getting cautious at current high prices in soybean meal market, soybean meal inventory is expected to increase fractionally next week. 

 

 

III. Soybean Oil

 

Price: This week (Jan 18-22), domestic soybean oil prices continue the downtrend. As of this Friday, the price for GB Grade I settles at 8,330-8,750 CNY/tonne in domestic coastal regions, a decline of 70-100 CNY/tonne. The overall nationwide price index is 8,520 CNY/tonne, a weekly decline of 120 CNY or 1.4% from 8,640 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	8,450	8,820	-280
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,500	N/A
		GB Grade 3	8,400	N/A
	Tianjin	GB Grade 1	8330-8350	8,420	70-90
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,400	8,500	-100
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	N/A	N/A
		GB Grade 3	N/A	N/A
National average		GB Grade 1	8,520	8,640	-120
		GB Grade 3	8,470	8,590	-120

 

 

Inventory: Soybean oil stocks further decline this week as terminal buyers take delivery at a fair pace, albeit a rise in soybean crush. Spot soybean oil is still tight in some regions, and some oil mills have a lot of outstanding contracts. In the week ending Jan 22, China’s soybean oil commercial inventories total 815,700 tonnes, down 32,300 tonnes by 3.81% from 848,000 tonnes last week, down 202,800 tonnes by 19.91% from 1,018,500 tonnes month on month, and down 35,200 tonnes by 4.14% from 850,900 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,113,900 tonnes.