SunSirs: The Bearish Sentiment still Exists, China Soybean Meal Market may Hit a New Low

According to the data from the Commodity Analysis System of SunSirs, starting from April, multiple bearish factors have suppressed the domestic soybean meal market, with the average market price falling below 3,300 RMB/ton. On April 1st, the average market price of soybean meal was 3,488 RMB/ton. On April 12th, the average market price of soybean meal was 3,290 RMB/ton, a decrease of 5.68%.

According to the annual data on soybean meal prices from SunSirs, the soybean meal market continued to decline from January to February 2024, with a decline of over 16%. Starting from March, there was an upward trend, and after oscillating for more than half a month, the soybean meal market continued to decline until mid April. On April 14th, the soybean meal price reached its lowest point in 2024, dropping to the same level as the same period in 2020.

According to monthly data from SunSirs, soybean meal has entered a downward trend since September 2023, falling for three consecutive months. In December, soybean meal only rose by 0.51%. From January to February 2024, soybean meal continued to decline, and rebounded in March. From April 1st to 12th, it fell by 5.68%.

Supply side: According to the data on imported soybeans from SunSirs, the quantity of imported soybeans from January to February 2024 was less than the same period last year. In March, the import of soybeans reached 5.541 million tons. From January to March, the cumulative import of soybeans reached 18.577 million tons, a year-on-year decrease of 10.8%. Although the quantity of soybeans in the first quarter has decreased compared to previous years, the number of imported soybeans will significantly increase starting from April. According to the forecast data from the National Grain and Oil Center, the monthly arrival volume of soybeans from April to June will be around 10 million tons. With the rebound of imported soybeans, the tight supply of soybean meal will gradually ease, and the market will experience weak upward momentum, with weak declines as the main trend.

Inventory: According to the statistical data of soybean meal inventory from SunSirs, the inventory of soybean meal continued to decline from January to April 2024. On April 5th, the soybean meal inventory was at the lowest point of the year, only 300,000 tons. With the rebound of imported soybean quantity, soybean meal inventory will hit the bottom and rebound, with 300000 tons at a seasonal low, providing limited support for the soybean meal market. In the future, with the recovery of inventory, the rebound space of the soybean meal market will be limited.

Futures: Since April, the weak oscillation in the soybean meal market has been the main trend. As of April 14th, the main contract for soybean meal closed at 3,255 RMB/ton, a decrease of 0.94% from early April. In the latter half of the year, South American soybeans were harvested and fully listed, while American soybean planting began one after another. External bearish sentiment led to a weak downward trend in soybean meal futures. The futures market is sluggish, and the spot soybean meal market is under pressure, with the main focus on continuing to hit the bottom.

Demand side: Starting from April, terminal aquaculture has gradually resumed, and the quantity of soybean meal purchased by feed factories has increased to a certain extent. Due to the bearish outlook of most feed factories on soybean meal in the future market, they buy and replenish stocks when prices rise, and purchase cautiously. The demand side has a relatively small boosting effect on the soybean meal market.

According to agricultural product analysts from SunSirs, there is still long-term supply pressure on soybean meal on the supply and demand side. In terms of technology, the probability of soybean meal decline has increased. In the short term, even if there is a rebound in the soybean meal market, the rebound will not be too large. The future will still be dominated by a weak downward trend, and it is expected to hit a new low.

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