Spot Soymeal Prices Fell Sharply In This Month

Due to the impact of technical buying and the fund adjustment position at the end of the month, the CBOT soybean futures market recovered on Wednesday and closed higher, technically not out of the weak pattern.U.S. exports remain the focus of the market.Since the start of the trade war between China and the United States, Chinese importers have all but stopped buying soybeans from the United States, leading to a sharp drop in sales of U.S. beans, which are supposed to be in the peak export season. The decline in export data is expected to be more pronounced later.South America's soybean planting acceleration is expected to see Brazil's early soybean exports to China in January.In addition, China has purchased 11 million tons of South American soybeans and delivered them in November and December, according to market assessments based on shipping schedule.South American soybean exports exceeded market expectations and played an important role in easing China's domestic soybean supply constraints.The U.S. bean market continues to be plagued by inventory pressures, and the china-us economic and trade consultations and the summit at the end of the month have drawn much attention.Domestic beans market overall maintain shock pattern, continue to digest the impact of the policy.

The main production areas of China have basically completed the harvest of new beans, new beans are centrally listed, the market supply is sufficient, the supply and demand are stable as a whole, the prices of different grades of soybeans vary greatly, and the prices of high-quality soybeans remain firm.The national grain and oil information center estimated domestic soybean production of 15.5 million tons and soybean imports of 86 million tons in 2018/19, well below usda estimates.Russian soybeans began to be shipped back in the New Year, increasing the domestic non-gm soybean supply.At present, the main factor dominating the price of domestic soybeans is still market demand. Compared with the output, domestic soybeans are still in surplus in the field of food and protein processing.Yesterday, the last auction of soybean in reserve for 2018 was held, and a total of 2.01 million tons of soybeans were sold in 20 lots of auctions in the whole year.Due to the low transaction price of stored and aged soybeans, it plays a significant role in stabilizing domestic soybean prices.Soybean futures market maintains the rhythm of weak operation, price center of gravity moves down, technically testing early low support, the weakness has not been relieved.The market is expected to continue the weak volatility trend, investors are advised to maintain the shock of the short - term participation in the market or continue to stay on the wait-and-see.

It will take time for the market to establish a new price balance after it loses demand in China.The domestic spot market for soybean meal remained stable on Wednesday, with the price quoted by the main oil plant in the coastal region running around 3,500 yuan/ton.The epidemic situation of African swine fever in China has not been effectively controlled, and the province where the outbreak occurred has expanded. The cumulative effect of the outbreak is not conducive to the long-term demand for feed.Recent regulatory policies, the market is worried about the prospects of soybean meal demand.Measures including the elimination of export tax rebates for soybean meal, the import of Indian vegetable meal and the introduction of low-protein feed, combined with supply and demand, have played a part in improving expectations of a soybean shortage.At present, the domestic port and oil plant have sufficient supply of soybean, and Brazilian soybean exports to China exceed expectations. In November and December, it is expected to import 11 million tons of soybean from South America, so as to narrow the supply gap of domestic soybean and soybean meal in winter and delay the emergence of the gap.In addition, the 1901 soymeal futures have been heavily shorted, and a decline in capital participation enthusiasm could weigh on price gains as the delivery date approaches.The domestic pulp futures market is expected to maintain a volatile trend today, investors are advised to maintain a volatile train of thought, from the perspective of cost support, soybean meal 1901 futures contract continued to adjust limited space, in case of a sharp decline may consider to buy more than a few, otherwise short - term or wait-and-see.

CBOT soybean oil market continues the low volatility trend, technically to maintain a weak rhythm.The weak rebound in Malaysia's palm oil market continued to fall, affected by poor export data and weak peripheral cooking oil.Domestic oil plate continued to dip Wednesday, although slightly higher but still not out of the decline.Domestic oil enterprises high inventory, stable demand and lack of highlights.Oil world expects China to continue to import large amounts of vegetable oil in the coming weeks to make up for declining domestic production due to lower crushing volumes of soybeans and keep the oil market loose.Brazil's soybean export potential is higher than expected, and the soybean supply gap is expected to decline in winter. Oil stocks will continue to increase under the current high operating rate of oil plants.In addition, the auction of import soybean oil will continue in November. The low initial auction price and transaction price can also be regarded as the bellwether of domestic soybean oil market.It is expected that the domestic oil plate continues to fluctuate today, investors are advised to maintain shock train of thought, can continue to maintain the high short view participate in oil futures trading or stay on the sidelines.


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