According to SunSirs monitoring, the auction for temporary stored soybeans is functioning normally. The four auctions early this month were mightily hot, and the strike prices broke the record for many times, overtaking 5,500 RMB/ton, which stimulated the price of domestic soybeans to climb continually. The two auctions in the second half of the month saw a decline in transaction volume and successively failed auctions. In the last transaction, all failed. Due to the declining volume of temporary stored soybeans, the domestic soybeans fall weakly. At the beginning of this month, the average price of domestic soybeans market was 5,100 RMB/ton, while at the end of July, it is 5,253 RMB/ton, which increases by 3.01%.
Temporary Stored Soybeans Goes Through Two Opposite Trend in July
Since July, temporary stored soybeans are listed on the market successively. Sinograin corporation has conducted 6 auctions for temporary stored soybeans. In the initial four times, the temporary stored soybean transactions are still hot, all at a premium. The highest strike price exceeded 5500 RMB/ton, stimulating domestic soybeans to rise continually. Although the transaction is hot, the transaction price is falling, from 5500 RMB/ton to 5270 RMB/ton, which also indicates that the market's acceptance of high-priced soybeans is going down.
On July 23, the fifth auction of temporary stored soybeans emerged the failure case for the first time. On the 29th, the sixth auctions failed all without any transaction. As the volume and price in temporary storage soybean auctions are both slumping, domestic soybean prices begin to fall.
Temporary Auction Presents A Depression, The Leeway for China Soybeans to Rise Is Limited
In the main producing area of Heilongjiang, fresh soybean foundation inventories are almost empty. The grains circulating in the market are mostly temporary stored soybeans. As the auctions for temporary stored soybeans are proceeding, the soybean trade bodies lower their admittance for high-price soybeans, so the temporary storage auction takes on the situation with volume and price declining together. Because the strike price of temporary stored soybeans has plunged under 5,000 RMB, the price of domestic soybeans is relatively settling the price lower, the upward trend is obstructed.
SunSirs agricultural analyst Libing deems that the strike price of temporary storage soybeans has fallen continually, and the passion from terminal protein factories to purchase has declined, so it can be estimated that the domestic soybeans will remain weak.
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