According to the commodity market analysis system of SunSirs, starting from November 7th, the soybean meal market entered a downward channel, with prices falling continuously and oscillating for a month. On December 5th, the decline of soybean meal slowed down and rebounded, rising 0.91% in two days. On November 7th, the average market price of soybean meal was 4,352 RMB/ton. On December 7th, the average market price of soybean meal was 3,976 RMB/ton, with a price drop of 8.64%.
The oscillation and decline in the soybean meal market this round are mainly influenced by the following factors:
Supply side: The import quantity of raw soybeans remains high, with a cumulative import of 82.415 million tons of soybeans from January to October, a year-on-year increase of 14.6%. According to data from the National Grain and Oil Center, on December 1st, the commercial inventory of imported soybeans from major oil factories in China reached 5.04 million tons, an increase of 1.55 million tons year-on-year. According to the monitoring of the shipping schedule, the arrival of soybeans at the port in December may exceed 10 million tons. The supply of imported raw materials for soybeans is loose, putting pressure on the rise of soybean meal prices.
Inventory: According to the statistics of domestic soybean meal inventory from January to December, it can be seen that from the second half of the year, the overall decline in soybean meal inventory is not significant and continues to remain high. From June to August, soybean meal inventories continued to show a fluctuating upward trend. After September, soybean meal inventory returned to the front line of 700,000 tons. During the Double Festivals period, soybean oil factories gradually shut down for maintenance, and soybean meal inventory decreased slightly, still approaching 700,000 tons overall. From October to November, although soybean meal inventories have declined, the overall situation remains high. In early December, soybean meal inventory returned to the forefront of 700,000 tons, an increase of 18.63% compared to the previous month. Due to the doubling of inventory pressure, the soybean meal market has been continuously declining.
Futures: After November 7th, American soybeans will be fully listed, and the futures prices of foreign American soybeans will continue to decline. In addition, South American soybeans are gradually entering the sowing period. The external market is dominated by bearish sentiment. The rebound of soybean meal market is weak, with weak decline as the main trend, and it has been falling until the end of the month, with a decline of over 6% compared to the beginning of the month. In December, due to the impact of rainy weather, the South American soybean yield is expected to increase, and soybean meal has significantly declined. On December 6th, the main contract for soybean meal closed at 3,927 RMB/ton, a decrease of 4.2% compared to November 7th. The futures market suppressed, and the spot soybean meal market followed suit.
Demand side: Starting from November, the purchasing enthusiasm of breeding enterprises has decreased, and the rigid demand for soybean meal has continued to be poor, resulting in a continuous decline in market trading volume. Terminal feed factories are mainly wait-and-see, cautious in procurement, and use as you go. The sustained slump in feed demand persisted until early December. Entering December, the terminal demand for feed raw materials remains weak, and the transaction volume of soybean meal in the market has declined. The spot market for soybean meal has continued to decline.
SunSirs agricultural product analyst believes that the main reason for the decline in the soybean meal market this round is due to high inventory of imported raw materials and supply pressure. The expectation of high yields of South American soybeans in external markets has increased, with bearish sentiment leading to sluggish terminal demand. Due to the continuous decline in the soybean meal market, which has fallen to a low level, the bearish sentiment has turned pale since December 5th, and the soybean meal market has rebounded, rising for two consecutive days, with an increase of less than 1%.
Entering mid to late December, during the South American soybean planting period, the weather theme is still ongoing, and the decline in the soybean meal market is slowing down, leading to a rebound. As bearish factors continue to dominate, the soybean meal market will continue to rise weakly in the long term.
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