I. Soybean

 

Price

 

Domestic soybean: The demand for soybean-made products is likely to increase in canteens and catering services, for people are on their way back to work positions and schools will open soon. Following a reduction in soybean production in regions like Jiangsu and Anhui provinces, some high-quality soybean supply is in shortage, which highlights a price hike in quality crops, and stocks are also reducing in producing regions. In addition, imported soybean prices remain high at ports, so that domestic soybean also enjoy a larger share. But as bulk consumers tend to wait due to high prices, the market is in thin trade. And farmers in northeastern China will start to make preparations for fieldwork from March, so there may come a wave of sales in the market, which will increase soybean supply. Overall, short-term domestic soybean prices may steady with a slight increase, and participants can keep an eye on arrivals of non-GM soybeans at domestic ports.

 

Imported soybean: Soybean cargoes from non-major producing countries such as Benin and Ethiopia are arriving at domestic ports. When this has increased the port supply, the market is still in thin trade, which is a constraint to the market. However, domestic port supply still remains small at present. Moreover, U.S. soybean futures are strong and even hit 1440 cents for a time, as Brazilian soybean harvest is slow and has been the slowest in a decade. This has made soybean import cost stay high. Moreover, 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 a hybrid of the bull and the bear, imported soybean market will likely be little changed in the short run. 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	5900	5780	120
	Inner Mongolia	Domestic, GB Grade 3	5660	5660	0
	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	5450	N/A
		Non-GM, Ukraine	5750	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	5900	5780	120
		Imported soybean	4850	4800	50

 

 

 

 

Crush: Domestic operation rates in oil mills rally from a low ebb with the completion of holidays this week (Feb 20-26), but the rally is smaller than the forecast for a lack of beans in some mills. Soybean crush at domestic mills totals 1,519,200 tonnes (meal 1,200,168 tonnes and oil 288,648 tonnes), up 1,190,200 tonnes or 361.76% from 329,000 tonnes last week. Meanwhile, operation rates (capacity utilization) are 42.84%, up 33.56% from 9.28% in the previous week. With the end of the vacation and imported soybeans put into mills, operation rates will continue rising next week and soybean crush is forecast to be 1.80 mln tonnes, bu as soybean arrivals reduce in March, some oil mills will suspend production and the crush may fractionally decline to 1.78 mln tonnes.

 

Soybean crush nationwide is estimated at 4.68 mln tonnes in February at current utilization rate, against the 8.8145 mln tonnes in the previous month and 6.3247 mln tonnes a year earlier.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 38,407,144 tonnes, up 4,380,544 tonnes or 12.87% from 34,026,600 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 12,916,206 tonnes, up 923,249 tonnes or 7.70% from 11,992,957 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks continue increasing at a small pace this week as soybean crush is not picking up as much as expected and imported soybean cargoes are arriving at ports. In the week as of Feb 26, China’s imported soybean stocks in coastal regions total 5,023,300 tonnes, up 262,900 tonnes by 5.52% from 4,760,400 tonnes last week and up by 14.53% from 4,386,000 tonnes from a year earlier.

 

 

Arrivals and the outlook: According to Cofeed, soybean import is predicted to be 95 cargoes or 6.202 mln tonnes for March, 7.6 mln tonnes for April, 10 mln tonnes for May, 10.3 mln tonnes for June and also 10 mln tonnes for July.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices first rise and then decline this week (Feb 22-26). As of this Friday, prices settle at 3,630-3,740 CNY/tonne in domestic coastal regions, mostly fluctuating by 20-90 CNY/tonne. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,820	3,900	-80
North China	Tianjin	3,680	3,740	-60
	Hebei	3,680	3,750	-70
Central China	Hubei	3,770	3,750	20
	Henan	3,740	3,780	-40
East China	Shandong	3,650	3,700	-50
	Jiangsu	3,610	3,680	-70
	Zhejiang	3,620	3,680	-60
	Shanghai	3,630	3,680	-50
	Fujian	3,680	3,700	-20
	Anhui	3,680	3,700	-20
South China	Guangdong	3,640	3,600	40
	Guangxi	3,760	3,690	70
National average		3,662	3,694	-32

 

 

Inventory: Soybean meal stocks are further higher this week as soybean crush has been picking up and soybean meal is in tepid trade due to slack demand right after the Chinese Lunar New Year. In the week as of Feb 26, China’s soybean meal stocks in coastal regions are 748,600 tonnes, up 51,700 tonnes by 7.42% from 696,900 tonnes last week and also up 104.70% from 365,700 tonnes from a year earlier.

 

Usually, soybean meal stocks will build up temporarily after the festival as some mills keep operating  whilst the delivery comes to a standstill during the festival holidays. And later, as consumers started to make replenishment and some domestic processors will keep low operation rates this year due to a delay in soybean harvest and shipment in Brazil, the overall soybean meal stocks will decline again.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices move further higher this week (Feb 22-26). As of this Friday, the price for GB Grade I settles at 9,560-9,760 CNY/tonne in domestic coastal regions, a rise of 300-550 CNY/tonne. The overall nationwide price index is 9,690 CNY/tonne, a weekly rise of 460 CNY or 5% from 9,230 CNY/tonne last week.

 

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
South China	Guangzhou	GB Grade 1	9,760	9460-9480	280-300
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	N/A	9,050
		GB Grade 3	N/A	8,950
	Tianjin	GB Grade 1	9560-9580	9010-9030	550
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	9,600	9,100	500
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	9,710	9240-9280	430-470
		GB Grade 3	N/A	N/A
National average		GB Grade 1	9,670	9,250	420
		GB Grade 3	9,720	9,200	520

 

 

Inventory: Soybean oil stocks decline a little bit this week as the delivery and the demand is recovering with the end of the festival, albeit a rise in soybean crush. In the week ending Feb 26, China’s soybean oil commercial inventories total 847,400 tonnes, down 26,200 tonnes by 3% from 873,600 tonnes last week, up 37,900 tonnes by 4.68% from 809,500 tonnes month on month, and down 350,400 tonnes by 29.25% from 1,197,800 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,118,300 tonnes.