The 6th-8th week of Soybean and soybean market weekly report in 2010: the soybean procurement was still weak, and the soybean meal price was up then down

1.       Soybean market

The 6th-8th week (February 8th-February 28th) in 2010, the holistic soybean market decreased slightly, and the price rebounded in some partial regions. Among them, in Heilongjiang Jixian, Youyi and Baoqing regions, the offering price of soybean was about 3600-3660yuan per ton, decreased 60-100yuan per ton compared with last week. Recently, affected by the international future price decrease, the soybean market of Heilongjiang regions was sluggish, and the traders and most oil factories suspended procurement.

Moreover, according to the latest news, recently, the Chinese grain reserve managerial enterprises had undersold 208.400 tons. The insiders claimed that, as the selling price would not lower than the national reserve price, therefore, it was hard to stimulate the procurement.

In terms of imported soybean, at present, the distributing price of the major domestic sports was about 3660-3700yuan per ton, decreased 20-40yuan per ton compared with the same period.

With the festival supported, the soybean oil price was stable, while due to the blocked transportation, the demand was weak and the transaction was sluggish, the stock volume of the local processed enterprises was large. With the festival approaching, the purchasing price of the soybean was stable, while the farmers were loath to sell, and the expected soybean price would not fluctuate violently.

2.       Soybean meal market

The 6th-8th week (February 8th-February 28th) in 2010, this week, domestic soybean meal spot market maintained the weak tendency, and the price was down. The oil factories continued to sell the long-term contracts with low price. Within this week, the decline in the American soybean suppressed the domestic spot price, and some feed enterprises had already accomplished their procurement, insiders were hesitating, so the transaction was sluggish. As of this Friday, the soybean meal marketable price continued to decrease, the range was 70-180yuan 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 3000-3150yuan per ton in Beijing-Tianjin-Hebei region, and 3030-3130yuan per ton in Liaoning, 3150-3200yuan per ton in Jiangsu-Zhejiang region,3060-3250yuan per ton in Henan, 3100-3140yuan per ton in Guangxi, 3180-3200yuan per ton in Guangdong.

3.       Market analysis:

Before the festival, 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 that had limited supportive impact on the domestic soybean meal market. This week, the American soybean price maintained its downward trend; the major reason was abundant harvest of the southern American soybean and the slump in the future price of the international crude oil. The expected price would not increase sharply.

(2)        The operating rate of the oil factorizes was high, and the soybean supply volume increased. In January, the expected soybean arrival volume was about 4.3 million tons, and in February, it was about 3.5 million tons. With the sufficient supply volume of raw material, although the squeezed profit dwindled apparently, due to the decrease of the soybean meal oil, some oil factories had certain volume of soybean meal contracts with high price; the operating rate was still high. It was reported that, except for the high closedown rate of the oil factories in eastern Heilongjiang regions, the oil factories in other regions still produced. It was reported that the oil factories of Longkou regions would not suspend the production during the festival.

(3)        At present, demanders mainly implemented the former contracts, with the price decreased successively, they were cautious to enter into the market. With the festival approaching, in the coastal regions, some traders reflected that, some feed enterprises had already accomplished the procurement. At present, the domestic aquatic breeding industry was in the dull season, so the feed sale volume was not optimistic, which put certain pressure on the oil factories.

4.       Market forecast:

It was only one week before the festival, due the sluggish transaction of the soybean meal oil, this week, there would be more oil factories suspending the production. Therefore, before the festival, the downward room for the domestic soybean meal price was limited. As the large arrival volume and the productive recovery of most oil factories, the conductive influence of the American soybean meal was worth concern.

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)