The 4th week of Soybean and soybean market weekly report in 2010: The soybean transaction was stagnant and soybean meal price continued to dwindle

1.       Soybean market

The 4th week (January 25th ¨CJanuary 31st) in 2010, the holistic soybean market was stable, and the price rebounded in some partial regions. Among them, in Heilongjiang Jixian, Youyi and Baoqing regions, the offering price of soybean was about 3700-3740yuan per ton, increased 40-60yuan per ton compared with last week. The soybean meal price decrease affected the soybean purchasing enthusiasm and the operating rate of the oil factories. It was reported that, in eastern Heilongjiang regions, most some and medium processed enterprises had suspended production. Moreover, according to the news of last Friday, in Haerbin regions, major large factories had stopped purchasing, while they still wanted to purchase before the festival. Due to the transportation standstill, traders had a large stock volume, and the purchasing enthusiasm declined somewhat. While with good expectation for the further market, they planned to sell after the festival, therefore, some suppliers were out of the market.

In terms of imported soybean, at present, the distributing price of the major domestic sports was about 3680-3720yuan per ton, decreased 20-30yuan per ton compared with the same period. According to the report of the national cereals and oil information center on Thursday, as the American and southern American soybean price was apparently lower than the domestic soybean price. At present, the cost price of the American soybean was about 3500yuan per ton, and the cost price of the Southern American soybean of the May selling date was about 3400yuan per ton, which was apparently lower than domestic soybean price of 3740yuan per ton. In the next weeks, the imported purchasing volume of the Chinese manufacturers would haunt around high level.

Recently, the oil meal price decreased in the producing regions, some regions reflected that, at present, the oil factories had large stock volume, which made the oil factories face certain pressure. It was reported that, recently, in Heilongjiang regions, most oil factories felt inadequate in maintaining production and mainly offered the supply for the surrounding market. Moreover, more and more factories suspended procurement and production, the market was sluggish. At present, in Heilongjiang regions, there had only 10 factories that sustained production, almost 80%-90% oil factories had operated off and on, and some factories even stopped production, this situation would last to the medium March. With the Chinese New Year approaching, affected by the loath selling attitude, the soybean transaction would not turn a little better. Moreover, the slow purchasing schedule of the northeastern soybean was taken into account, it was reported that, relevant department had already gone to investigate, and the policy adjustment was worth concerns.

2.       Soybean meal market

The 4th week (January 25th ¨CJanuary 31st) in 2010, this week, domestic soybean meal spot market maintained the weak tendency, and the price was down. Within this week, the American stock price continued to dwindle and made the new lowest record in these two months. Compared with last week, the downward room did not enlarge, while the actual transaction price was still down, and the presale price decreased as well. As of this Friday, the soybean meal marketable price continued to decrease, the range was 10-100yuan per ton, and more details were as followed:

On Friday, the price was about 3150-3200yuan per ton in Jixian area of Heilongjiang; it was about 3120-3180yuan per ton in Beijing-Tianjin-Hebei region, and 3150-3310yuan per ton in Liaoning, 3150-3320yuan per ton in Jiangsu-Zhejiang region,3100-3350yuan per ton in Henan, 3200-3300yuan per ton in Guangxi, 3200-3280yuan per ton in Guangdong.

3.       Market analysis:

This week, the offering price of the spot soybean meal continued to decrease, the analysis revealed that the main reasons, which had affected the soybean meal price, were as follows:

(1)        The American soybean price continued to decrease without the supportive factors. Since beginning of this year, the marketable price decreased successively. Until now, the March contract price accumulatively decreased 116.75 cents, the January 12th report of USAD enhanced the expectation for the American soybean output, and its contract price decreased 78.75 cents. At present, the international soybean market was still in the seasonal downward trend. The Chinese buyers diverted to southern market to import the soybean.

(2)        The supply volume of soybean meal was sufficient. As the imported soybean successively arrived at the ports, the January expected arrival volume would be over 4 million tons, at present; the holistic operating rate of oil factories was high, although the recent soybean meal price decreased, while the squeezed profit was relatively well. Took the Longkou regions in Shandong province for example, as of this Friday, the stock volume of soybean meal oil was about 2000 tons, while the contract volume of the soybean and soybean meal was large, and the arrival volume would increase at the end of this month.

(3)        With the weak demand, the current transaction was still sluggish. It was reported that, in January, the sale volume of the feed decreased 15%-20% compared with the same analytic period, and the sale volume of some pig feed enterprises decreased 30%. Moreover, oil factories had sold many contracts, including that of January and February; recently, the feed enterprises and traders were cautious to enter into market.

(4)        The feed enterprises would like to restock before the Chinese New Year, which supported the current market. At present, the contract price of oil factories was gradually decreasing, while the price different between the spot price and contract price of February was not large.

4.       Market forecast:

It was reported that, recently, the arrival cost of imported soybean would increase slightly, and the price would be 3750yuan per ton. However, the current foreign soybean market was still restrained by the negative influence of the surrounding market. With the supple volume increase in the domestic soybean spot market, the expected price would adjust in short time, and the price would be down with limited rebind room.

Table 1¡¡ Spot prices of domestic soybean (Yuan/ton)

Table 2¡¡Spot prices of domestic soybean meal (Yuan/ton)

Table 3¡¡ Port price of import soybean (Yuan/ton)

Figure 1¡¡Average prices of soybean meal in China (Yuan/ton)