I. Soybean

 

Price

 

Domestic soybean: Soybean prices remain at high levels compared to this time in previous years, and its constraint on the demand is also noted. Downstream protein processors are cautious and inactive in soybean market, so that soybean prices in producing regions have weak momentum to follow the uptrend. This is bearish to soybean market. But farmers are stalling sales with the depletion of surplus in producing regions, and some farmers are selling soybeans for seed. And 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. Moreover, the central budget increased support for grain production this year, by enlarging incentive to major producing counties and providing subsidies to cultivated land fertility protection and to corn and soybean producers. The policy is also lending support to domestic soybean market. Overall, short-term soybean prices may fluctuate, and participants can keep an eye on arrivals of non-GM soybean arrivals at domestic ports and relevant policies.

 

Imported soybean: Port imported soybean supply is increasing at present: Shandong port now has some 25,000 tonnes in stock and 1 vessel expected to come in days, mainly for trade; and Nandong port has around 11,000 tonnes in stock and 1 vessel expected in March. The demand is tepid as downstream buyers remain inactive and tend to wait and see. This is constraining imported soybean market in China. But weather in South America is still a point of uncertainty, for which Buenos Aires Grain Exchange lowered down its projection for Argentine soybean production by 2 mln tonnes to 44 mln tonnes. And U.S. soybean prices are bolstered to stay high by tight supplies, so that import cost remain stubbornly high. 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	5960	5980	-20
	Inner Mongolia	Domestic, GB Grade 3	5840	5800	40
	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	5430	20
		Non-GM, Ukraine	5800	5800	0
		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	5960	5980	-20
		Imported soybean	4920	4900	20

 

 

 

 

Crush: Some mills are in a lack of beans due to small soybean cargoes arriving at ports in February and March and some are facing swelling meal inventory (especially in Guangdong and Liaoning provinces), so operation rates fall as expected in China this week (Mar 6-12). Soybean crush at domestic mills totals 1,448,700 tonnes (meal 1,144,473 tonnes and oil 275,253 tonnes), down 232,800 tonnes or 13.84% from 1,681,500 tonnes last week. Meanwhile, operation rates (capacity utilization) are 40.85%, down 6.57% from 47.42% in the previous week. Soybean crush is expected to pick up slightly in the coming two weeks but still stay at a low level, to 1.50 mln tonnes next week and to 1.52 mln tonnes in week 12.

 

Soybean crush nationwide is estimated at 5.73 mln tonnes in March at current utilization rate, against the 4.682 mln tonnes in the previous month and 6.5783 mln tonnes a year earlier.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 41,537,344 tonnes, up 4,380,344 tonnes or 11.79% from 37,157,000 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 16,046,406 tonnes, up 923,049 tonnes or 6.1% from 15,123,357 tonnes of the corresponding period in 2020.

 

Inventory: Soybean stocks continue reducing this week as soybean volume put into mill stock remains small. In the week as of Mar 12, China’s imported soybean stocks in coastal regions total 4,398,700 tonnes, down 377,100 tonnes by 7.90% from 4,775,800 tonnes last week and up by 52.57% from 2,882,900 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, 10.4 mln tonnes for May, 10.3 mln tonnes for June and 9.8 mln tonnes for July.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices continue the decline this week (Mar 8-12). As of this Friday, prices settle at 3,270-3,350 CNY/tonne in domestic coastal regions, a decline of 180-230 CNY/tonne. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,420	3,660	-240
North China	Tianjin	3,340	3,520	-180
	Hebei	3,320	3,510	-190
Central China	Hubei	3,390	3,600	-210
	Henan	3,360	3,580	-220
East China	Shandong	3,310	3,490	-180
	Jiangsu	3,315	3,480	-165
	Zhejiang	3,315	3,500	-185
	Shanghai	3,320	3,500	-180
	Fujian	3,460	3,670	-210
	Anhui	3,340	3,550	-210
South China	Guangdong	3,290	3,470	-180
	Guangxi	3,340	3,600	-260
National average		3,327	3,526	-199

 

 

Inventory: Soybean meal stocks slightly reduce this week, as feed manufacturers are picking up the pace in delivery under the consumption of stocks. In the week as of Mar 12, China’s soybean meal stocks in coastal regions are 744,700 tonnes, down 106,700 tonnes by 12.53% from 851,400 tonnes last week and also up 45.33% from 512,400 tonnes from a year earlier. As domestic buyers are making replenishment after the festival, and some domestic millers have a plan for downtime periodically in March and April due to negative crush margins and a delay in soybean harvests and shipments in Brazil, soybean meal stocks are expected to continue a reduction.

III. Soybean Oil

 

Price: Domestic soybean oil prices continue a rise for a fourth consecutive week this week (Mar 8-12). As of this Friday, the price for GB Grade I settles at 10,160-10,360 CNY/tonne in domestic coastal regions, a rise of 190-300 CNY/tonne. The overall nationwide price index is 10,290 CNY/tonne, a weekly rise of 275 CNY or 2.75% from 10,015 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	10280-10330	10000-10030	280-300
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	10,250	9,850	400
		GB Grade 3	10,150	9,750	400
	Tianjin	GB Grade 1	10160-10180	9860-9880	300
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	10,160	9,970	190
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	10330-10360	10,100	230-260
		GB Grade 3	N/A	N/A
National average		GB Grade 1	10,330	10,020	310
		GB Grade 3	10,280	9,970	310

 

 

Inventory: Soybean oil stocks continue a decline sharply this week, as soyoil output reduces with a decline in the crush and mid-and-downstream buyers are taking delivery at a brisk pace. In the week ending Mar 12, China’s soybean oil commercial inventories total 748,250 tonnes, down 82,400 tonnes by 9.92% from 830,650 tonnes last week, down 110,550 tonnes by 12.87% from 858,800 tonnes month on month, and down 651,300 tonnes by 46.54% from 1,399,550 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,180,500 tonnes.