Specifically, as of November, the news of China purchasing US soybeans supported the strength of the US soybean futures price, and the cost side exerted a positive impact on the China soybean meal spot price. However, as China's follow-up purchases of US soybeans were insufficient, the US soybean futures price continued to lack the upward momentum due to the poor implementation of China's soybean demand, showing an unstable trend and having a neutral impact on the China soybean meal price. According to the data statistics from Zhongchuang Information, as of November 13th, the national soybean meal spot average price was 3072 RMB/ton, an increase of 39 RMB/ton compared to the end of the previous month, and the price difference between the month's high and low was 15 RMB/ton, with a relatively limited fluctuation range.
From the perspective of China supply and demand, the overall supply of raw soybeans is sufficient, supporting the upstream enterprises to maintain a high level of production and the market supply of spot sources is relaxed. The monitoring data from Zhongchuang Information shows that as of the first week of November, the soybean meal inventory of soybean crushing enterprises across the country was 9.63 million tons, which has declined from the year's high point but is still higher than the level of the same period last year. Most upstream enterprises have stable production plans, some are facing obvious inventory pressure, and the phenomenon of urging for delivery is still relatively common nationwide, which exerts a certain suppression on the spot price of soybean meal.
From the demand side, downstream enterprises are cautious about taking delivery of spot goods, with the main demand being for rolling replenishment of essential supplies, and some positions have declined, showing overall weakness. From the middle of the month, some soybean crushing groups actively promoted sales of far-month basis combinations mainly for the period of December to March, with transactions at the flat water price in the East China and South China regions, and the basis in Shandong was 20 RMB/ton. The mood of transactions in the downstream market of the market picked up as of the 10th-13th of November, with a total of 4.48 million tons of far-month soybean meal contracts traded nationwide.
On the international front, the main theme of abundant global soybean production will limit the upside space for US soybean futures, while the tightened supply and demand balance will provide a relatively solid bottom support for soybean prices.
Chinaally, the current 13% import tariff on US soybeans restricts China commercial purchases, and the profitability of South American soybeans is not ideal. Soybean purchase progress in December and February is still not encouraging, which corresponds to a slightly tight supply of raw materials in the first quarter. Considering the support from the raw material cost side and the seasonal relief of the subsequent supply pressure, the bottom of China soybean meal prices may be limited to some extent, and the overall trend is more likely to rise than fall.
To sum up, the China spot market is expected to maintain a stable fundamental situation in the first half of November, with the spot price of soybean meal fluctuating and narrowing. In the future, the mentality of price support will be supported by the recovery of crushing profit and the cost support of the middle and upstream, and the pressure of soybean meal inventory will gradually ease. DCI predicts that the China soybean meal spot average price may be slightly strong before the end of December, with the trading range referring to 3040-3150 RMB/ton.
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