SunSirs: Suddenly Warm and Cold, China Soybean Meal Lacks Sustained Upward Momentum

According to the commodity market analysis system of SunSirs, starting from January, bearish sentiment dominated, and the domestic soybean meal market continued to be weak with a downward trend. The market fluctuated and fell for more than a month, with a decline of over 13%. After the Spring Festival, soybean meal futures opened higher, and the domestic soybean meal market stopped falling and rising. As of February 19th, the average market price of soybean meal was 3,442 RMB/ton, a daily increase of 0.82%.

The rise and fall of the soybean meal market in this round will be analyzed from the following aspects

Supply side: Starting from mid January, with the arrival of the Spring Festival and the end of the terminal stocking market, most domestic soybean oil factories are gradually starting to shut down plans. During the Spring Festival, the operating rate of soybean oil factories significantly decreased, and the supply of soybean meal was insufficient. After the holiday, the supply gap supported the rise of domestic soybean meal spot market.

Inventory: According to the domestic soybean meal inventory statistics chart from November 2023 to February 2024, it can be seen that the growth rate of soybean meal inventory has accelerated since December, and by the end of the month, soybean meal inventory has reached a high of 840,000 tons. On the week of January 12, 2024, soybean meal inventory reached a new high, reaching 980,000 tons. Starting from mid January, soybean meal inventory has been continuously declining, and during the Spring Festival, it has fallen back to the forefront of 740,000 tons. The continuous decline in soybean meal inventory has supported a rebound in the soybean meal market.

Futures: Futures were suspended during the Spring Festival, and bearish factors in the soybean futures market were gradually digested by the market. After the holiday, soybean meal rose in the morning. On February 19th, the main contract for soybean meal opened at 2,999 RMB/ton, up 39 RMB/ton, and closed at 3,042 RMB/ton, up 59 RMB/ton in a single day. After the holiday, the futures market rose, while the spot soybean meal market followed suit.

Demand side: During the Spring Festival period, the stocking market for feed manufacturers has ended. After the holiday, some enterprises have not yet started production, and the demand for purchasing soybean meal has declined. It will still take some time for the comprehensive recovery of soybean meal demand. The terminal pig inventory is low, aquaculture is in the off-season, feed demand is in the off-season, soybean meal demand is weak, and the market is still under pressure.

SunSirs agricultural product analyst believes that the main reason for the rise in the soybean meal market after the holiday is due to the shutdown of soybean oil factories during the Spring Festival, tightening supply, low inventory levels, and rising futures prices. Multiple positive factors support the rise in the soybean meal market.

In late February, from a supply perspective, domestic imported soybeans remained at a high level. After the Spring Festival maintenance period, soybean oil factories began operating one after another, and supply pressure remained. Terminal feed demand was sluggish, and bearish factors remained. After this round of rise, soybean meal will continue to experience a downward trend.

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