I. Soybean

 

Price

 

Domestic soybean: As warmer weather is increasing the difficulty in stocking soybeans and due to a reduction in terminal consumption, soybean processors in southern China are cautious and tend to wait in fear of high risks and there is a continued decline in processing. Farmers have a stronger will to sell stocks now as they need to cash out in preparation for the spring ploughing. And some traders are also rushing to clear stocks now. These are bearish to soybean market. But 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. Overall, short-term domestic soybean prices may still have some downside space, and participants can keep an eye on arrivals of non-GM soybean arrivals at domestic ports and relevant policies.

 

Imported soybean: Imported soybeans stocks are ample at domestic ports now, and China’s monthly soybean arrivals at ports are forecast to hit 10 mln tonnes in May-July, for Brazilian producers are harvesting and selling soybeans at a brisker pace. These are negative to imported soybean market in China. But the market demand has picked up as downstream buyers have consumed stocks and are making replenishment. Meanwhile, the most-active soybean contract on CBOT settled up its daily limit and still fluctuate at the high level after an unexpectedly bullish USDA report, which is also lending support to the cost side. Overall, imported soybean market in China is predicted to fluctuate in the short run, and 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	5780	5840	-60
	Inner Mongolia	Domestic, GB Grade 3	5620	5700	-80
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7400	7600	-200
	Shandong	Imported, Argentina	N/A	N/A
		GM, PNW	4900	4900	0
		GM, U.S. GULF	5000	5060	-60
North China	Tianjin	Non-GM, Ethiopia	N/A	5450
		Non-GM, Ukraine	5800	5950	-150
		Non-GM, Canada	6050	6050	0
		GM, PNW	N/A	N/A
		GM, U.S. GULF	N/A	N/A
National average		Domestic soybean	5780	5840	-60
		Imported soybean	4950	4960	-10

 

 

 

 

Crush: Operation rates fractionally decline in China this week (Mar 27-Apr 2) as some mills suspend production due to soybean shortages or swelling meal inventory. Soybean crush at domestic mills totals 1,545,600 tonnes (meal 1,221,024 tonnes and oil 293,664 tonnes), down 18,380 tonnes or 1.17% from 1,563,980 tonnes last week. Meanwhile, operation rates (capacity utilization) are 43.58%, down0.52% from 44.10% in the previous week. Soybean crush is expected to be 1.52 mln tonnes next week and 1.75 mln tonnes in week 15.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 46,147,134 tonnes, up 4,689,034 tonnes or 11.31% from 41,458,100 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 20,656,196 tonnes, up 1,231,739 tonnes or 6.34% from 19,424,457 tonnes of the corresponding period in 2020.

 

Inventory: Soybean stocks continue reducing this week as the volume put into mill stock remains small. In the week as of Apr 2, China’s imported soybean stocks in coastal regions total 3,798,500 tonnes, down 149,100 tonnes by 3.78% from 3,947,600 tonnes last week and up by 51.73% from 2,503,300 tonnes from a year earlier.  

 

Arrivals and the outlook: According to Cofeed, soybean import is predicted to be 117 cargoes or 7.597 mln tonnes for April, 10.2 mln tonnes for May, 9.2 mln tonnes for June, 8.5 mln tonnes for July, and 7.9 mln tonnes for August. Chinese importers are slowing down purchases due to dismal crush margins on Dalian, which will affect the overall arrivals in coming months. The data will be updated every week based on buying and shipment.

 

II. Soybean Meal

 

Price: Domestic soybean meal prices fluctuate to rise this week (Mar 29-Apr 2). As of this Friday, prices settle at 3,250-3,410 CNY/tonne in domestic coastal regions, a rise of 20-40 CNY/tonne. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,500	3,450	50
North China	Tianjin	3,370	3,350	20
	Hebei	3,370	3,340	30
Central China	Hubei	3,350	3,330	20
	Henan	3,330	3,310	20
East China	Shandong	3,290	3,270	20
	Jiangsu	3,260	3,250	10
	Zhejiang	3,270	3,260	10
	Shanghai	3,270	3,240	30
	Fujian	3,370	3,380	-10
	Anhui	3,310	3,300	10
South China	Guangdong	3,280	3,280	0
	Guangxi	3,340	3,310	30
National average		3,306	3,299	7

 

 

Inventory: Soybean meal stocks increase this week on slow shipments as mid-to-downstream buyers remain cautious. In the week as of Apr 2, China’s soybean meal stocks in coastal regions are 774,400 tonnes, up 31,300 tonnes by 0.30% from 743,100 tonnes last week and also up 183.97% from 272,700 tonnes from a year earlier.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices first decline and later rise to keep a downtrend this week (Mar 29-Apr 2). Grade I soybean oil price declined to 8,920-9,140 CNY/tonne in the first half of the week (a decline of 440-490 CNY from last Friday) and later it rose to 9,260-9,390 CNY/tonne (a rise of 220-300 from the week low), with an overall decline of 120-270 CNY from last Friday. The overall nationwide Grade I soyoil price index is 9,320 CNY/tonne, a weekly decline of 200 CNY or 2.10% from 9,520 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	9280-9310	9,380	↓70-100
		GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	N/A	N/A
		GB Grade 3	N/A	N/A
	Tianjin	GB Grade 1	9260-9280	9380-9430	↓120-150
		GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	9,280	N/A
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	9,360	9,630	-270
		GB Grade 3	N/A	N/A
National average		GB Grade 1	9,320	9,550	-230
		GB Grade 3	9,270	9,500	-230

 

 

Inventory: Soybean oil stocks continue falling this week as the output reduces following a decline in soybean crush. In the week ending Apr 2, China’s soybean oil commercial inventories total 622,600 tonnes, down 50,500 tonnes by 7.5% from 673,100 tonnes last week, down 208,100 tonnes by 25.05% from 830,700 tonnes month on month, and down 528,700 tonnes by 45.92% from 1,151,300 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,132,100 tonnes.