I. Soybean

 

Price

 

Domestic soybean: Domestic soybean prices are falling slowly across the country, but it is normal to see a slight decline as it can be seen from historical data that the demand is usually slack from March to April. And on Dalian Commodity Exchange, May contract of soybean futures is about to take delivery. Downstream processors are cautious and tend to wait in fear of high risks, so processing volume has also been reducing. In addition, 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. These are curbing the decline in domestic soybean price. Overall, short-term 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 soybean arrivals at ports are forecast to hit 27 mln tonnes in April-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, U.S. soybean prices are fluctuating at the high level, bolstered by lower-than-forecast U.S. soybean planting intentions in the USDA’s 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	5700	5780	-80
	Inner Mongolia	Domestic, GB Grade 3	5600	5620	-20
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7440	7400	40
	Shandong	Imported, Argentina	N/A	N/A
		GM, PNW	N/A	4900
		GM, U.S. GULF	4920-5050	5000	50
North China	Tianjin	Non-GM, Ethiopia	N/A	N/A
		Non-GM, Ukraine	5900	5800	100
		Non-GM, Canada	6020	6050	-30
		GM, PNW	N/A	N/A
		GM, U.S. GULF	N/A	N/A
National average		Domestic soybean	5700	5780	-80
		Imported soybean	4920	4950	-30

 

 

 

 

Crush: Operation rates continue a bigger-than-expected decline this week due to as mills are facing with a delay in soybean arrivals or swelling meal inventory. Soybean crush at domestic mills totals 1,355,200 tonnes (meal 1,070,608 tonnes and oil 257,488 tonnes), down 190,400 tonnes or 12.32% from 1,545,600 tonnes last week. Meanwhile, operation rates (capacity utilization) are 38.22%, down 5.36% from 43.58% in the previous week. Soybean crush is expected to rally from the low level to 1.58 mln tonnes next week and 1.70 mln tonnes in week 16.

 

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 47,502,334 tonnes, up 4,687,634 tonnes or 10.95% from 42,814,700 tonnes a year earlier.

 

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 22,011,396 tonnes, up 1,230,339 tonnes or 5.92% from 20,781,057 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 9, China’s imported soybean stocks in coastal regions total 3,732,200 tonnes, down 66,300 tonnes by 1.75% from 3,798,500 tonnes last week and up by 47.80% from 2,525,100 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 (Apr 5-9). As of this Friday, prices settle at 3,310-3,430 CNY/tonne in domestic coastal regions, a rise of 20-50 CNY/tonne. 

 

China's Soybean Meal Weekly Price  (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,520	3,500	20
North China	Tianjin	3,410	3,370	40
	Hebei	3,400	3,370	30
Central China	Hubei	3,380	3,350	30
	Henan	3,370	3,330	40
East China	Shandong	3,300	3,290	10
	Jiangsu	3,300	3,260	40
	Zhejiang	3,310	3,270	40
	Shanghai	3,320	3,270	50
	Fujian	3,410	3,370	40
	Anhui	3,360	3,310	50
South China	Guangdong	3,340	3,280	60
	Guangxi	3,370	3,340	30
National average		3,348	3,306	42

 

 

Inventory: Soybean meal stocks decrease this week as the crush drops to a low level of 1.35 mln tonnes and on improving trade in soybean meal market. In the week as of Apr 9, China’s soybean meal stocks in coastal regions are 725,500 tonnes, down 48,900 tonnes by 6.31% from 774,400 tonnes last week and also up 332.35% from 167,800 tonnes from a year earlier.

 

 

III. Soybean Oil

 

Price: Domestic soybean oil prices first rise and later decline this week (Apr 5-9). Grade I soybean oil price is 9,190-9,360 CNY/tonne, a decline of 10-80 CNY from last Friday. The overall nationwide Grade I soyoil price index is 9,270 CNY/tonne, a weekly decline of 50 CNY or 0.54% from 9,320 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	9210-9230	9280-9310	↓70-80
		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	9,190	9260-9280	↓70-90
		GB Grade 3	9,210	N/A
East China	Rizhao, Shandong	GB Grade 1	9,200	9,280	-60
		GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	9,360	9,360	0
		GB Grade 3	N/A	N/A
National average		GB Grade 1	9,270	9,320	-50
		GB Grade 3	9,220	9,270	-50

 

 

Inventory: Soybean oil stocks continue falling this week as the output reduces following a decline in soybean crush. In the week ending Apr 9, China’s soybean oil commercial inventories total 592,500 tonnes, down 30,100 tonnes by 4.83% from 622,600 tonnes last week, down 155,800 tonnes by 20.82% from 748,300 tonnes month on month, and down 435,200 tonnes by 42.35% from 1,027,700 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,102,500 tonnes.