SunSirs: Soybean Meal Led The Increase Among Agricultural Product in March

There are 13 kinds of commodities in the list of rising and falling commodity prices of agricultural and sideshow sectors in March 2020, among which 6 kinds of commodities with a rise of more than 5% account for 27.3% of the monitored commodities in this sector. The top 3 commodities were soybean (20.00%), soybean meal (15.12%) and DDGS (11.52%).

On a month-on-month basis, there are a total of 9 commodities falling, and 2 commodities falling by more than 5%, accounting for 9.1% of the monitored commodities in this sector. The top 3 products of the decline were rapeseed oil (-7.38%), astragalus (-7.35%) and ophiopogonis (-2.93%).

Overall increase in March was 2.53%

In March, the agricultural products sector is mainly strong. Soybean and soybean meal performance was bright. By soybean meal market support, DDGS and rapeseed meal market went up. Soybean and soybean meal rose while oil prices fell. 

China grain reserve prices continue to increase soybean prices skyrocketed

Since March, the domestic soybean went crazy, and the price continues to rise rapidly, constantly breaking new records. The price increased from 3.6 RMB/kg to 4.2 RMB/kg. The average price of domestic soybean at the beginning of the month was 3,666 RMB/ton. On March 31, the average price of domestic soybean was 4,400 RMB/ton, up 20% and 23.02% from a year earlier.

Producing regions in Heilongjiang province logistics transportation cost increase. The high-quality beans source was scarce, and traders of soybean feel market bullish and begin to purchase. Plus, terminal soy products gradually restore starts, with rigid demand. The loading price of most commodity beans in main areas in Heilongjiang Province rise all the way up to 4200 RMB/ton. The first rise in price was 400 RMB/ton. 

In mid-March, northeast area grain storage in grain depot in hang dish domestic soybean launched the acquisition of the new season so soon. Beian, Dayangshu, and dunhua ect. also began the acquisition and the purchase price was 4200 RMB/ton. Because the state reserves the purchase price is higher, the farmer supports the price heart is heavier, and the domestic soybean price continues to rise.

On March 25, China grain storage and big poplar branch warehouse again raised the price of domestic soybean to 4,400RMB/ton, continuing to boost the price of domestic soybean. At the end of march, the mainstream purchase price of domestic soybean in Heilongjiang province was 4,300 RMB/ton, while the purchase price of high-quality soybean exceeded 4,400 RMB/ton.

Soybean meal bottomed out as supply concerns increased

In March, soymeal prices bottomed out and continued to rise after a brief dip. At the beginning of the month, the average price of soybean meal was 2890 RMB/ton. At the end of the month, the average price of soybean meal was 3327 RMB/ton, up 15.12%.

At the beginning of march, the soybean meal market performance was relatively low. Since the middle of the month, the multi-factor advantage of soybean meal has gradually emerged. The number of imported soybeans to port has been greatly reduced, and the supply of raw materials is tight. Some domestic soybean oil plants have been shut down for maintenance, and the terminal feed enterprises have been started. The rigid demand has increased, and the soybean meal inventory is at a low level. Supported by multiple factors, the soybean meal market has been rising steadily. By March 22nd, the mainstream price exceeded 3000 RMB/ton, with the price up by 6.24% compared with March 12th.

After March 23th, as the foreign market on the Brazilian soybean and Argentine soybean meal exports of concern, coupled with the rise of the United States soybean, domestic soybean meal futures market is not calm, and futures early trading higher open. 

Soybean meal spot market rose with the plate. The mainstream manufacturers quote more than 3200 RMB/ton, a day up 200 RMB/ton. On March 12th, the price rose nearly by 400 RMB/ton. At the end of the month, the spot price of soybean meal continued to remain high, and the mainstream price exceeded 3300 RMB/ton, with March soybean meal prices up 15.12%.

Long - short game with oil up and down

In March, oil prices mixed, after the decline in the face of a rise, the overall was still downward. Palm oil and soybean oil decline and increase is basically the same, and the price fell less while rapeseed oil fell more severe. Palm oil fell by 0.78% in March. Soybean oil fell by 0.86% and rapeseed oil overall fell by 7.38%.

At the beginning of this month, the external oil market was in a downturn, and the terminal catering demand was weak. On September 9, the external oil futures plunged, the main contract of soybean oil and palm oil futures opened down by the daily limit, and the spot price plunged with the market, with a daily decline of nearly 250 RMB/ton. 

The average price of soybean oil in the market was 5413 RMB/ton, down 6.83% from early march, or 4.3% on a single day. The market average price of palm oil was 4,938 RMB/ton, down 3.86% from early march, or 4.34% on a single day. Soybean oil palm oil dropped hand in hand, rapeseed oil with the plate dropped.

In the mid of March, boosted by the central bank that reduced the accurate news, plus the Malaysian palm plantations close news, the market for palm oil supply worries. Palm oil prices falling to blunt, and soybean oil prices rose, with disc palm oil spot prices rose by more than 8% overall. In the second half of March, soybean oil as a whole rose by more than 10%, while rapeseed oil decline is slowing, as a whole fell nearly 1%. Since the oil price in the first half of the month fell too much, the oil price in the second half of the month rose roughly the same as that in the first half of month as palm oil and soybean oil been, while the rapeseed oil still kept going down.

Market Forecast 

SunSirs agricultural products analyst Li Bing think that in April, agricultural products plate prices will usher in a reshuffle. Soybean is basically close to the highest price, and up space is limited. Soybean oil plant is starting up, and soybean meal will usher in a down market. With the food and beverage industry returning to work, and the school has been open, oil and grease consumption will increase, and oil is still expected to return to the rising trend. In April, agricultural prices are still expected to rise.

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