I. Soybean

 

Price

 

Domestic soybean: Transportation cost is rising sharply and soybean purchasing cost is also lifted, for containment measures against the COVID-19 are escalating locally under a growing social mobility toward the end of the lunar year. And farmers are bullish about the market outlook and have strong sentiment to hoard their reducing surplus. Meanwhile, the supply of high-quality soybeans is in shortage due to a sharp production reduction in regions like Jiangsu and Anhui provinces. 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. But the market is thin trade as purchasers are less active now that downstream buyers have almost completed replenishment, and some traders have left the market and will be back only after the festival. Hence, spot soybean market is in a lack of support. Overall, domestic soybean market is predicted to keep steady and fluctuate at the high level.

 

Imported soybean: Port soybean supply is relatively small and traders are limiting the shipment, so imported soybean is in tight supply in the market. Meanwhile, U.S. soybean prices stay at high levels on strong export demand and as Brazilian soybean harvest is postponed by rainfalls, so domestic soybean import cost also remains high. 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. However, the market is in thin trade with the approaching of the Lunar New Year holidays, and it is said that imported soybean in small batch will cross the border to enter the country, which will undermine 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	5740	5740	0
	Inner Mongolia	Domestic, GB Grade 3	5600	5620	-20
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7700	7700	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	5500	5550	-50
		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	5740	0
		Imported soybean	4840	4840	0

 

 

 

 

Crush: Oil millers are working to reach the peak crush in order to meet the festival demand, so operation rates continue an uptrend this week (Jan 23-29). Soybean crush at domestic mills totals 2,148,800 tonnes (meal 1,697,552 tonnes and oil 408,272 tonnes), up 41,180 tonnes or 1.95% from 2,107,620 tonnes last week. Meanwhile, operation rates (capacity utilization) are 60.59%, up 1.16% from 59.43% in the previous week. As operation rates will decline toward the end of the lunar year, soybean crush is predicted to stay at 2.05 mln tonnes next week and fall to 1.44 mln tonnes in week 6.

 

Soybean crush nationwide is estimated at 8.79 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 a year earlier. (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 33,658,044 tonnes, up 5,730,544 tonnes or 20.52% from 27,927,500 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 8,167,106 tonnes, up 2,273,249 tonnes or 38.57% from 5,893,857 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks continue decreasing this week as soybean crush further picks up to 2.14 mln tonnes. In the week as of Jan 29, China’s imported soybean stocks in coastal regions total 4,519,300 tonnes, down 322,300 tonnes by 6.66% from 4,841,600 tonnes last week but up by 26.83% from 3,563,000 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 are still in correction this week (Jan 25-29). As of this Friday, prices settle down 30-80 CNY to 3,600-3,810 CNY/tonne in domestic coastal regions. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Liaoning	4,150	4,230	-80
North China	Tianjin	3,810	3,980	-170
	Hebei	3,780	4,000	-220
Central China	Hubei	3,800	3,900	-100
	Henan	3,760	3,880	-120
East China	Shandong	3,760	3,850	-90
	Jiangsu	3,740	3,750	-10
	Zhejiang	3,750	3,780	-30
	Shanghai	3,750	3,750	0
	Fujian	3,700	3,800	-100
	Anhui	3,790	3,940	-150
South China	Guangdong	3,600	3,600	0
	Guangxi	3,630	3,650	-20
National average		3,750	3,824	-74

 

 

Inventory: Soybean meal stocks continue reducing this week on brisk delivery as some mid-and-downstream buyers are stocking up for the festival. In the week as of Jan 29, China’s soybean meal stocks in coastal regions are 418,400 tonnes, down 63,600 tonnes by 13.20% from 482,000 tonnes last week and up 16.02% from 360,600 tonnes a year earlier. As buyers are wrapping up festival replenishment and soybean crush may still stay high above 2 mln tonnes, soybean meal stocks will probably slow down decline.

 

In previous years, soybean meal stocks will build up temporarily after the festival as some mills keep operating during the festival holidays whilst the delivery comes to a standstill, but will decline again as buyers go for replenishment after the festival. The overall soybean meal stocks will keep building up from April. 

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices rally this week (Jan 25-29). As of this Friday, the price for GB Grade I settles at 8,600-8,900 CNY/tonne in domestic coastal regions, a rise of 150-330 CNY/tonne. The overall nationwide price index is 8,750 CNY/tonne, a weekly rise of 230 CNY or 2.7% from 8,520 CNY/tonne in the previous week.

China's Soybean Oil Weekly Price (CNY/Tonne)

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
South China	Guangzhou	GB Grade 1	8,900	8,450	450
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	N/A	8,500
		GB Grade 3	N/A	8,400
	Tianjin	GB Grade 1	8,600	8330-8350	250-270
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,600	8,400	200
		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	8,750	8,520	230
		GB Grade 3	8,700	8,470	230

 

 

Inventory: Soybean oil stocks notably slow down decline this week with higher soybean crush and as the festival replenishment of packaging oils draws to a close. In the week ending Jan 29, China’s soybean oil commercial inventories total 804,550 tonnes, down 11,150 tonnes by 1.37% from 815,700 tonnes last week, down 185,450 tonnes by 18.73% from 990,000 tonnes month on month, and down 45,450 tonnes by 5.35% from 850,000 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,106,600 tonnes.