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.