SunSirs: The Soybean Meal Market rebounded weakly in the First Half of 2023, oscillating and falling

According to the data from the Commodity Market Analysis System of SunSirs, the soybean meal market experienced ups and downs in the first half of 2023, with ups and downs and mainly oscillating declines, with an overall decline of nearly 16%. On January 1st, the average market price of soybean meal was 4,682 RMB/ton. On June 29th, the average market price of soybean meal was 3,948 RMB/ton, a decrease of 15.68%.

The overall soybean meal market in the first half of 2023 can be divided into four stages. The first stage is from January to March, which is a period of oscillatory decline. At the beginning of January, the average price of soybean meal market was 4,682 RMB/ton. On March 27, the average price of soybean meal market was 3,784 RMB/ton, a decrease of 12% overall. Phase 2: From April to May 14th, during the rapid upward period, the overall spot market rose by 18.21%; The third stage: May 15th to May 31st, a period of rapid decline, with an increase in the number of imported soybeans and a continuous decline in the soybean market, resulting in an overall decline of 9.66%; Phase 4: June; During the oscillating upward period, influenced by the weather and the continuous rise in the US soybean meal market, the domestic soybean meal market rebounded, with an overall increase of 4.72%.

Supply side: In the first half of the year, the quantity of imported soybeans as raw materials continued to increase. In May, imported soybeans reached a new high, with an import volume of 12.02 million tons, an increase of 65.4% compared to the previous month; From January to May 2023, soybean imports reached 42.306 million tons, an increase of 11.2% year-on-year. The supply of imported soybean raw materials is loose, the operating rate of Soybean oil plants is increasing, the supply of soybean meal is rising, and the market is under pressure.

Inventory: After the New Year's Day, soybean meal inventory briefly declined and continued to rise. After mid March, it continued to decline and sharply declined, dropping to around 200,000 tons in mid May, a new historical low. At the end of May, the operating rate of the Soybean oil plant continued to rise, and the soybean meal inventory began to accumulate, rising all the way to the front line of 700,000 tons. The decline and recovery of soybean meal inventory also constrain the soybean meal market. With high soybean meal inventory, the overall soybean meal market is difficult to improve.

Demand side: In the first quarter, due to the presence of the New Year's Day and Spring Festival, large pigs were sold out as a whole, and feed demand entered the off-season, suppressing the soybean meal market. In April and May, the rigid demand for terminal aquatic feed increased, and the soybean meal market was supported. In June, the overall demand for feed remained sluggish, and the soybean meal market rose weakly.

Agricultural product analysts from SunSirs believe that the oscillation and decline in soybean meal prices in the first half of 2023 are mainly due to an increase in the supply of imported raw materials, a doubling of soybean meal inventory pressure, and overall weak demand. Multiple bearish factors have led to a short-lived rise in soybean meal prices caused by futures.

In the second half of the year, the number of imported soybeans arriving in Hong Kong is expected to continue to increase, and demand is unlikely to improve significantly. At the futures level, the El Nino effect may bring another wave of upward momentum, with insufficient sustained upward momentum. It is expected that the soybean meal market will continue to oscillate and decline in the second half of the year.

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