China Soybean Weekly Report--as of Jan 8, 2021

2021-01-12 www.mnk-9.com

I. Soybean

Price

Domestic soybean: Grain prices have been boosted by strong fund buying appetite, so that grain holders are bullish about the market prospect. Cold waves have hit portions of soybean producing regions and roads are covered with snow and ice, in addition that the corornavirus pandemic has interrupted transportation in some regions, so there is a rise in transportation cost. Besides, the supply of high-quality soybeans is in shortage due to a sharp production reduction in regions like Jiangsu and Anhui provinces. Hence, domestic soybean market is in tight supplies. Meanwhile, downstream buyers are active in stocking up for the Chinese Lunar New Year, which further strengthen the support in soybean prices. Moreover, domestic soybean is taking up more share in the wake of a rise in imported soybean prices, which is also positive to the market. However, some traders now have an intention to book profits to recoup funds toward the end of the year, so their prices have become loose. In addition, sellers are in control of soybean prices now, so that some middle and small-sized bean products manufacturers become more reluctant to accept high-price soybeans and choose to suspend production, which is cubing rises in soybean prices. In the short term, imported soybean market is predicted to keep an uptrend in fluctuation on bullish factors.

Imported soybean: The overall supply of imported soybeans are small at ports, coupled with routine commodity inspections in other ports, so the supply gets tense in the market. In addition, concerns over weather in South America have bolstered U.S. soybean prices to continue sharp rises and hit 1,350 cents. This thus continues to lifting soybean import cost in China, so that imported soybean prices keep an uptrend this week. Meanwhile, 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. However, soybean cargoes from the U.S. are substantial, and domestic market is less active after rises in soybean rices, which are still negative to the market. In the short term, imported soybean market will probably keep firm on bullish factors. 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	5560	5520	40
	Inner Mongolia	Domestic, GB Grade 3	5500	5400	100
	Heilongjiang	Imported, Russia	N/A	N/A
East China	Jiangsu	Domestic soybean	7060	6900	160
	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	N/A	N/A
		Non-GM, Ukraine	N/A	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	5560	5520	40
National average		Imported soybean	4470	4300	170

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Crush: Operation rates for soybean crush across the country continue falling this week (Jan 2-8) for manpower shortage under pandemic in northeast China, belated soybean supply in some mills, and a production suspension under swollen meal inventory in parts of southern China. Soybean crush at domestic mills totals 1,684,580 tonnes (meal 1,330,818 tonnes and oil 320,070 tonnes), down 24,300 tonnes or 1.42% from 1,708,880 tonnes last week. Meanwhile, operation rates (capacity utilization) are 48.11%, down 0.7% from 48.81% in the previous week.

Soybean meal market has been in strong trade this week, sharp rises in meal prices have also lifted buyers’ enthusiasm in taking delivery, and some buyers also get down to stock up for the Chinese Lunar New Year in advance for fear that the coronavirus pandemic could affect the logistics; hence, operation rates will turn to enhance in coming two weeks. Soybean crush is expected to rise to 1.93 mln tonnes next week (week 2) and to 2.03 mln tonnes in week 3.

In the crop year of 2020/21 (from Oct 1st, 2020), China’s soybean crush totals 27,419,644 tonnes, up 2,488,544 tonnes or 9.98% from 24,931,100 tonnes a year earlier.

In the calendar year of 2021 (from Jan. 1st, 2021), China’s soybean crush amounts to 1,928,706 tonnes, down 968,751 tonnes or 33.43% from 2,897,457 tonnes of the corresponding period in 2020.

说明: 1610329589(1)

Inventory: Soybean stocks are higher in China this week, as domestic soybean crush fell more than the forecast to 1.68 mln tonnes. In the week as of Jan 8, China’s imported soybean stocks in coastal regions total 5,251,100 tonnes, up 109,700 tonnes by 2.13% from 5,141,400 tonnes last week and up by 29.64% from 4,050,400 tonnes year over year.

Arrivals and the outlook: According to Cofeed, soybean import is predicted to be 124 cargoes or 8.156 mln tonnes for January, 6.7 mln tonnes for February, 6.3 mln tonnes for March and 7.8 mln tonnes for April and 10 mln tonnes for May.

II. Soybean Meal

Price: Domestic soybean meal prices sharply rise this week (Jan 4-8). As of this Friday, prices settle up 160-220 CNY to 3,440-3,660 CNY/tonne in domestic coastal regions.

China's Soybean Meal Weekly Price (CNY/Tonne)
Region		This week	Last week	Variation
Northeast China	Jilin	3,870	3,640	230
North China	Tianjin	3,650	3,470	180
North China	Hebei	3,670	3,470	200
Central China	Hubei	3,600	3,440	160
Central China	Henan	3,660	3,500	160
East China	Shandong	3,600	3,380	220
	Jiangsu	3,550	3,380	170
	Zhejiang	3,560	3,400	160
	Shanghai	3,530	3,380	150
	Fujian	3,540	3,400	140
	Anhui	3,590	3,400	190
South China	Guangdong	3,490	3,350	140
South China	Guangxi	3,500	3,390	110
National average		3,577	3,407	170

Inventory: Soybean meal stocks decline in China this week as soybean crush goes below the forecast and due to strong soybean meal trade throughout the week. In the week as of Jan 8, China’s soybean meal stocks in coastal regions are 803,700 tonnes, down 56,400 tonnes by 6.56% from 860,100 tonnes last week and up by 36.35% from 589,400 tonnes a year earlier. As soybean crush will go to 1.90 mln tonnes weekly in coming two week, soybean meal inventory is expected to only have small declines.

说明: 1610351202(1)

III. Soybean Oil

Price: This week (Jan 4-8), domestic soybean oil prices fluctuate to climb. As of this Friday, the price for GB Grade I settles at 8,880-9,150 CNY/tonne in domestic coastal regions, a rise of 180-260 CNY/tonne. The overall nationwide price index is 9,020 CNY/tonne, a weekly rise of 220 CNY or 2.5% from 8,880 CNY/tonne in the previous week.

China's Soybean Oil Weekly Price (CNY/Tonne)
Region		Grade	This week	Last week	Variation
South China	Guangzhou	GB Grade 1	9,100	8,890	210
South China	Guangzhou	GB Grade 3	N/A	N/A
North China	Qinhuangdao, Hebei	GB Grade 1	8,950	8,650	300
	Qinhuangdao, Hebei	GB Grade 3	8,850	8,550	300
	Tianjin	GB Grade 1	8,880	8,690	190
	Tianjin	GB Grade 3	N/A	N/A
East China	Rizhao, Shandong	GB Grade 1	8,880	8,700	180
	Rizhao, Shandong	GB Grade 3	N/A	N/A
	Zhangjiagang, Jiangsu	GB Grade 1	9,150	N/A
	Zhangjiagang, Jiangsu	GB Grade 3	N/A	N/A
National average		GB Grade 1	9,020	8,800	220
National average		GB Grade 3	8,970	8,750	220

Inventory: Soybean oil stocks further reduce this week, as soybean crush continues a downtrend. In the week ending Jan 8, China’s soybean oil commercial inventories total 884,350 tonnes, down 74,000 tonnes by 7.72% from 958,350 tonnes last week, down 180,650 tonnes by 16.96% from 1,065,000 tonnes month on month, and down 40,150 tonnes by 4.34% from 924,500 tonnes year on year. And the five-year (2016-2020) average at the same period is 1,185,200 tonnes.

说明: 1610352089(1)

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