According to the monitoring data of the Commodity Market Analysis System of SunSirs, starting from September, the soybean meal market entered a downward channel, with prices continuing to hit the bottom and falling continuously, with a decline of over 20%. At the beginning of September, the average market price of soybean meal was 5,012 RMB/ton. On December 26th, the average market price of soybean meal was 3,956 RMB/ton, a decrease of 21.07%.
Specifically analyze the main reasons for the continuous decline in the soybean meal market this round.
Supply side: From January to November 2023, the cumulative import of soybeans was 89.625 million tons, a year-on-year increase of 13.3%. Starting from September, the quantity of imported soybeans has declined, with only 5.158 million tons in October. In November, imported soybeans returned to a high level, reaching 7.92 million tons. The quantity of imported soybeans continued to increase in December. On December 22nd, commercial inventories of imported soybeans from major oil factories in China reached 5.42 million tons, an increase of 2.3% compared to the previous month. The loose supply of imported soybeans suppressed 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 after September, soybean meal inventory has returned to the front line of 700,000 tons. During the Double Festival period, soybean oil factories have gradually stopped work for maintenance, and soybean meal inventory has decreased, but overall it is still close to 700,000 tons. 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: Since September, American soybeans have entered the harvest season, with production basically set and market bearish factors dominating. The soybean meal market is mainly oscillating and falling. After the National Day holiday, the soybean meal market fell, and in the middle of the month, the bearish sentiment was exhausted. The soybean meal futures market ushered in an upward trend, while the external bearish sentiment remained. The soybean meal futures market continued to oscillate and fall, while the spot market followed suit. Starting from November, due to the comprehensive listing of American soybeans, the price of foreign American soybeans has been continuously decreasing, and South American soybeans have gradually entered 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, leading to a significant decline in soybean meal prices. The futures market is suppressed, and the spot soybean meal market is oscillating and falling.
Demand side: Starting from September, aquaculture has entered the off-season, and the demand for terminal feed has weakened. After the Double Festival, the demand for aquatic feed has significantly declined, and the stocking market for aquaculture enterprises has ended, resulting in a significant decline in the rigid demand for soybean meal. Entering November, the purchasing enthusiasm of breeding enterprises has declined, 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 continuous low demand for feed continued until December, with weak demand for feed raw materials at the terminal. The spot market for soybean meal continued to fluctuate and decline, with prices continuously falling.
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, doubled supply pressure, limited boost in futures markets, sustained sluggish demand for terminal feed, and multiple negative factors, resulting in a continuous bottoming out of the soybean meal spot market.
At the end of December, boosted by the expected increase in Brazilian soybean production reduction, the soybean meal futures market showed signs of improvement, and spot prices also returned to the 4,000 RMB mark. New Year's Day and Spring Festival are approaching, and soybean oil factories will gradually shut down for maintenance. Supply is tightening, and the soybean meal market in the future may emerge from a low point and usher in an upward trend. The upward trend is expected.
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