According to data from SunSirs, in July, the domestic soybean meal market continued to oscillate and rise, continuously rising, with an overall increase of nearly 14%. At the beginning of the month, the average market price of soybean meal was 3,956 RMB/ton. On July 28th, the average market price of soybean meal was 4,486 RMB/ton, with a price increase of 13.4%.
The fluctuation of soybean meal market in July is mainly influenced by the following factors:
Supply side: In the first half of 2023, the quantity of imported soybeans from China significantly increased. The quantity of imported soybeans remained high in May and June. China imported 10.27 million tons of soybeans in June, with a cumulative import of 52.575 million tons from January to June, a year-on-year increase of 13.6%. Starting from July, the import of soybeans to port has gradually decreased. According to data from the Ministry of Commerce, the actual shipment of soybeans in the first half of July was 435,800 tons, a year-on-year decrease of 18.84%. Supply side pressure eased, supporting the continuous upward trend of soybean meal market.
Inventory: According to the statistical chart of domestic soybean meal inventory from January to July, it can be seen that soybean meal inventory began to decline continuously in March and had already dropped to the annual low of 200,000 tons in early May. In mid May, soybean meal inventory continued to increase, reaching an annual peak of 710,000 tons until the end of June. Since July, soybean meal inventory has dropped to around 52 tons and gradually rebounded. As of the week ending July 25th, soybean meal inventory has returned to the first line of 600,000 tons. The pressure on soybean meal inventory is still ongoing, and the rise to a certain extent has limited the room for soybean meal market growth.
Futures: The external market of American beans is in the growth period, and due to the impact of El Nino weather, the excellent rate of American beans continues to decline. The external market of soybean futures continues to rise, and the domestic soybean meal market continues to rise. The spot market is supported and prices continue to rise. Throughout July, the soybean meal market rose by over 13%, and prices have returned to historical highs, breaking the 4,500 RMB mark. On July 28th, the settlement price of the main contract for soybean meal was 4,302 RMB/ton, an increase of over 8% compared to the beginning of July.
Demand side: Starting from July, the weather has turned hot with continuous high temperatures. Due to the impact of high temperatures, the level of meat consumption in feed terminals has decreased. Market entities are cautious in purchasing feed and use it as needed. Soybean meal transactions have weakened, and demand has slowed down, suppressing the rise of soybean meal prices.
SunSirs agricultural product analyst at SunSirs, believes that the rise in the soybean meal market in July is mainly due to the impact of El Ni ñ o weather, with US soybean futures continuously rising. From the perspective of supply and demand, there is limited room for a significant increase in the soybean meal market. In August, it was difficult to alleviate the pressure on the supply and demand side, and the weather gradually improved. The soybean meal market may gradually decline in the future.
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