I. Soybean

 

Price

 

Domestic soybean: A sharp reduction in soybean production in regions like Jiangsu and Anhui provinces has led to shortages of some high-quality soybeans and highlighted a rise in their prices. And farmers are expected to increase corn planting acreage this year, as returns have been pushed up by high corn prices. Domestic soybean supply may get tightening under normal consumption, so that local farmers are hoarding stocks under bullish mood. In addition, Dalian No.1 soybean futures are strong as risk funds flow into soybean field. These are bullish to domestic soybean market. But purchasing bodies are less active in soybean market as prices have risen to hit a multi-year high, so the overall spot soybean shipments are slower than in previous years, and some small manufacturers also choose cheaper imported soybeans to lower down cost, which is negative to the market. On the whole, short-term domestic soybean prices may steady with a slight rise, and participants can keep an eye on arrivals of non-GM soybeans at domestic ports and relevant policies.

 

Imported soybean: Port imported soybean supply is increasing at present, with 35,000 tonnes at Shandong port and 30,000 tonnes at Nantong port now, but downstream demand is tepid and buyers are not active. The overall market is in a wait-and-see mood, which is constraining imported soybean market in China. But U.S. soybean futures are strong on tightening U.S. soybean supply under robust crush demand and as soybean exports are slow in Brazil due to a delayed harvest, so that soybean import cost stay high for Chinese importers. 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	5980	5900	80
	Inner Mongolia	Domestic, GB Grade 3	5800	5660	140
	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	5430	5450	-20
		Non-GM, Ukraine	5800	5750	50
		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	5980	5900	80
		Imported soybean	4900	4850	50

 

 

 

 

Crush: Operation rates continue picking up in China this week (Feb 27-Mar 5), but the rise is smaller than the forecast due to a lack of beans after cargo unloading was disrupted by the port congestion in Rizhao Port, Shandong. Soybean crush at domestic mills totals 1,681,500 tonnes (meal 1,328,385 tonnes and oil 319,485 tonnes), up 162,300 tonnes or 10.6% from 1,519,200 tonnes last week. Meanwhile, operation rates (capacity utilization) are 47.42%, up 4.58% from 42.84% in the previous week. Following smaller soybean arrivals at ports in February and March and due to swelling meal inventory, soybean crush is expected to decline next week to around 1.58 mln tonnes, and then slightly pick up to 1.67 mln tonnes in week 11. The overall crush remains at a low level.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 40,088,644 tonnes, up 4,402,744 tonnes or 12.34% from 35,685,900 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 14,597,706 tonnes, up 945,449 tonnes or 6.93% from 13,652,257 tonnes of the corresponding period in 2020.

 

 

Inventory: Soybean stocks reduce this week on higher soybean crush and as imported soybean volume remains not huge. In the week as of Mar 5, China’s imported soybean stocks in coastal regions total 4,775,800 tonnes, down 247,500 tonnes by 4.93% from 5,023,300 tonnes last week and up by 25.29% from 3,811,700 tonnes from a year earlier. 

Arrivals and the outlook: According to Cofeed, soybean import is estimated at 90 cargoes with 5.94 mln tonnes in February and 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 10 mln tonnes for July.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices fluctuate to decline this week (Mar 1-5). As of this Friday, prices settle at 3,460-3,580 CNY/tonne in domestic coastal regions, a decline of 130-190 CNY/tonne. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,660	3,820	-160
North China	Tianjin	3,520	3,680	-160
	Hebei	3,510	3,680	-170
Central China	Hubei	3,600	3,770	-170
	Henan	3,580	3,740	-160
East China	Shandong	3,490	3,650	-160
	Jiangsu	3,480	3,610	-130
	Zhejiang	3,500	3,620	-120
	Shanghai	3,500	3,630	-130
	Fujian	3,670	3,680	-10
	Anhui	3,550	3,680	-130
South China	Guangdong	3,470	3,640	-170
	Guangxi	3,600	3,760	-160
National average		3,526	3,662	-136

 

 

Inventory: Soybean meal stocks are further higher this week as soybean crush has been picking up and soybean meal is in slow delivery due to slack demand at present. In the week as of Mar 5, China’s soybean meal stocks in coastal regions are 851,400 tonnes, up 102,800 tonnes by 13.73% from 748,600 tonnes last week and also up 80.61% from 471,400 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 continue sharp rises this week (Mar 1-5). As of this Friday, the price for GB Grade I settles at 9,860-10,100 CNY/tonne in domestic coastal regions, a rise of 210-390 CNY/tonne. The overall nationwide price index is 10,015 CNY/tonne, a weekly rise of 325 CNY or 3.4% from 9,690 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	10000-10030	9,760	240-270
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	9,850	N/A
		GB Grade 3	9,750	N/A
	Tianjin	GB Grade 1	9860-9880	9560-9580	300
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	9,970	9,600	370
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	10,100	9,710	430-470
		GB Grade 3	N/A	N/A
National average		GB Grade 1	10,020	9,670	350
		GB Grade 3	9,970	9,720	250

 

 

Inventory: Soybean oil stocks continue declining this week on smaller-than-forecast soybean crush and as the market demand is recovering. In the week ending Mar 5, China’s soybean oil commercial inventories total 830,650 tonnes, down 16,750 tonnes by 1.98% from 847,400 tonnes last week, down 5,950 tonnes by 0.71% from 836,600 tonnes month on month, and down 513,550 tonnes by 38.2% from 1,344,200 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,177,600 tonnes.