According to the commodity market analysis system of SunSirs, the soybean meal market in May broke free from a downturn and ushered in an upward trend. The market continued to rise, but due to the continued bearish sentiment, it experienced a correction at the end of the month, with an overall oscillating upward trend. On May 1st, the average market price of soybean meal was 3,340 RMB/ton. On May 29th, the average market price of soybean meal was 3,502 RMB/ton, with a price increase of 2.93%.
According to the annual comparison chart of soybean meal prices in SunSirs, it can be seen that from January to February 2024, the soybean meal market continued to decline, with a decline of over 16%. Starting from March, there was an upward trend, and after oscillating for more than half a month, the soybean meal market continued to decline until mid April. On April 14th, the soybean meal price reached its lowest point in 2024, dropping to the same level as the same period in 2020. Starting from April 15th, the soybean meal market experienced a brief rebound, and after the rise, it continued to fluctuate weakly, with prices remaining around 3,300 RMB/ton. After May Day, the soybean meal market rebounded, with an increase of over 4%, and the market average price broke through the 3,400 RMB/ton mark. After the sharp rise, it oscillated at a high level, and then rebounded after reaching 3,500 RMB/ton at the end of the month. On May 29th, the average price of soybean meal in the market was 3,438 RMB/ton, still at a four-year low.
The main reason for the rise in soybean meal prices in May is due to excessive rainfall in Brazil, a decrease in production expectations, a continuous rise in soybean meal futures prices, and a follow-up rise in spot prices. However, the number of imported soybeans entering the port on the supply side has increased, while the demand for feed on the demand side remains sluggish. After a phase of rise in the soybean meal market, it has gradually declined.
Let's analyze the main factors affecting the rise and fall of the soybean meal market in May from the perspectives of supply and demand and technology.
Supply side: The total import volume of soybeans from January to April 2024 was 27.148 million tons, a decrease of 797,000 tons compared to last year. In April, China's soybean import volume was 8.572 million tons, an increase of 54.69% from 5.54 million tons in March and an increase of 18.04% from the same period last year. Since May, the import volume of soybeans to Hong Kong has been continuously increasing, with an estimated import volume of 10 million tons. Supply side pressure remains, limiting the upward potential of the soybean meal market.
Inventory: According to the statistics of soybean meal inventory from SunSirs, the inventory of soybean meal continued to decline from January to April 2024. On April 5th, the soybean meal inventory was at its lowest point of the year, only 300,000 tons. Starting from mid April, soybean meal inventory showed a rebound trend and continued to increase. On the week of April 19th, soybean meal inventory had exceeded 440,000 tons. Starting from May, soybean meal continues to accumulate inventory and the inventory level continues to rise. As of the week ending May 23rd, soybean meal has reached 600,000 tons, doubling from its lowest point. With the continuous increase of inventory, the soybean meal market is under pressure.
Futures: During the May Day holiday, foreign soybean futures rose. After the holiday, the domestic soybean meal futures market saw a surge in price. On May 6th, the main contract for soybean meal closed at 3475 RMB/ton, up 91 RMB/ton. In the middle of the year, due to the continuous rainstorm and flood, Brazil's soybean output is estimated to be 154.5 million tons, down by about 2 million tons. The external soybean market is supporting, while domestic soybean meal futures are oscillating higher. At the end of the month, bullish factors were digested by the market, and soybean meal futures gradually rebounded. Throughout May, the current trend of soybean meal futures was similar, with futures prices supporting an upward oscillation in the soybean meal market.
Demand: Starting from May, the demand for terminal aquatic feed aquaculture has increased, and the quantity of soybean meal purchased by feed factories has increased. Due to the loose supply of soybean meal and significant market fluctuations, terminal feed factories are still cautious in purchasing, and the demand side has not yet increased, which has a general boosting effect on the soybean meal market.
SunSirs agricultural product analyst believes that in May, the futures market rose due to the expected reduction in Brazilian soybean production. Despite weak supply and demand, soybean meal experienced a rebound trend and continued to fluctuate at a high level, only to see a pullback at the end of the month.
Entering June, the import volume of soybeans to port has significantly increased, supply pressure has doubled, and inventory remains high. These bearish factors are still present, and whether soybean meal can break through the encirclement and rise mainly depends on the weather factors during the US bean planting period. There is still hope for a brief surge in the market, and there is still insufficient momentum for a sustained surge. The soybean meal market in June is expected to fluctuate downward.
If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.