According to the Commodity Market Analysis System of SunSirs, since July, the soybean meal market has continued to oscillate and rise, with prices hitting new highs until early August, reaching nearly 4,700 RMB/ton. On July 1st, the average market price of soybean meal was 3,956 RMB/ton. On August 9th, the average market price of soybean meal was 4,668 RMB/ton, with a price increase of 18%.

The oscillation and rise of soybean meal market in this round are mainly influenced by the following factors:

Supply side: In the first half of 2023, the overall quantity of imported soybeans from China far exceeded the same period last year. The quantity of imported soybeans increased significantly in May and June. China imported 10.27 million tons of soybeans in June, with a cumulative import of 52.575 million tons from January to June, a year-on-year increase of 13.6%. In July, soybean imports reached 9.731 million tons, a decrease of 5.24% month on month. The quantity of imported soybeans has decreased, the supply of soybean meal has decreased, and the market continues to rise.

Inventory: According to the statistical chart of domestic soybean meal inventory from January to August, it can be seen that soybean meal inventory began to decline continuously in March and had already dropped to the annual low of 200,000 tons in early May. In mid May, soybean meal inventory continued to increase, reaching an annual peak of 710,000 tons until the end of June. Since July, soybean meal inventory has decreased and gradually rebounded, continuing until early August. As of the week ending August 2nd, soybean meal inventory has increased to around 700,000 tons. The pressure on soybean meal inventory is still present, suppressing the upward trend of the market.

Since July, the external market of American soybeans has been in a growing period. Due to the impact of El Ni ñ o weather, the excellent rate of American soybeans is at a low level. The external market of soybean futures has been continuously rising, and the domestic soybean meal market has been supported, leading to continuous oscillation and upward trend. The spot market continued to oscillate and rise with the market, continuing until early August. On August 9th, the settlement price of the main contract for soybean meal was 4,410 RMB/ton, an increase of over 13% compared to early July.

Demand side: Entering July, the high temperature weather is even more frequent. Due to the impact of the high temperature, the level of meat consumption in feed terminals has decreased. Market entities are cautious in purchasing feed and use it as needed. The transaction of soybean meal is average. At the beginning of August, the terminal meat prices remained high, and the prices of live pigs continued to rise. As of August 9th, the average market price of live pigs exceeded 17 RMB/kg, increasing breeding profits, and the demand for soybean meal procurement by feed factories gradually improved, supporting the rise of the soybean meal market.

SunSirs agricultural product analyst at SunSirs, believes that after August, the supply of soybean meal will tighten, demand will improve, market demand will accelerate, and external favorable factors will still exist. Soybean meal will continue to operate at a high level in the future.

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