SunSirs: State Reserve Continues to Fail Auctions, Chinese Soybean Market Weakens

According to the monitoring of SunSirs: At the end of July, the auction of temporary storage soybeans all failed, and the acceptance of temporary storage soybeans by soy products manufacturers declined. Beginning in August, the re-sale of temporary storage soybeans was still unsuccessful, which was negatively suppressed. The price of domestic soybeans stopped rising and gradually decreased. As of August 14, the average market price of domestic soybeans was 5,150 yuan/ton, down 1.97% from the beginning of the month and 0.98% higher than the price at the beginning of July.

According to the monthly fluctuation chart of domestic soybeans from January to July 2020, it can be seen that the price of domestic soybeans has been rising for the first 7 months. Soybeans rose the most in March, and the increase began to narrow in May, and soybeans were temporarily stored in June. The auction went public, the transaction was hot, and the price of domestic soybeans began to rise again. In August, domestic soybeans began to weaken.

Temporary storage of soybeans continues to pass, domestic soybean market weakens

In July, the temporary storage soybean auction began to sell hot. For the first time, there were unsold auctions on the 23rd and all unsold auctions appeared on the 29th. On August 13th, the reserve price of soybeans at the State Reserve's soybean auction was lowered by 200 yuan, and all the auctions again went unsuccessfully, as did the reserve soybeans. While all the State Reserve soybeans failed to sell, the transaction price of temporary storage soybeans also continued to decline. On the 23rd, the highest transaction price of temporary storage soybeans was only 4,950 yuan/ton. The demand for soy products in the summer has weakened, and the manufacturers' enthusiasm for purchasing temporary storage soybeans has declined.

The unsuccessful auction of State Reserve soybeans has already reflected the decline in the recognition of the high prices of State Reserve soybeans by terminal soy products factories and traders, and the decline in purchasing demand. The State Reserve soybeans have been auctioned for almost two months since June, and the tight supply of soybeans in the market has improved. The prices of domestic soybeans in Heilongjiang’s main producing areas have also begun to drop. The mainstream quotations are 2.5-2.6 yuan/jin, and some tower grains are 2.45 yuan/jin, and the price is 0.05-0.1 yuan/jin lower than the previous period.

SunSirs agricultural products analysts believe that the demand for terminal soy products is not good, soy products factories and market trading entities continue to wait and see, domestic soybean prices are unlikely to have room for short-term increase, and the main reason is that they continue to weaken and stabilize.

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