Chinese soybean, soymeal and soyoil prices slump as market reopens

Cash soybeans and soymeal and soyoil futures on China’s Dalian Commodity Exchange plunged on Monday as the domestic market resumed trading after the prolonged Chinese New Year holiday, with traders responding to the worsening coronavirus epidemic across the country.

Soymeal futures slid 2%-3% across the whole curve by Monday’s close, approaching a nine-month low.

Soyoil futures plummeted 4%-7% to a three-month low amid a market-wide selloff that saw traders fleeing the entire agricultural sector ranging from cotton to eggs.

The most liquid soymeal futures contract closed more than 3% down on the day at CNY2,580/mt ($367.52/mt) while the most liquid soyoil futures fell nearly 7% to CNY6,040/mt ($860.4/mt).

China’s currency also weakened against the dollar with the exchange rate standing at CNY7.02 per dollar, down 1.3% from last Friday.

On the contrary, risk-averse assets such as gold and silver gained 1%-3%.

In the physical market, Chinese demand for soybean shipment remained slow, due to the combination of national holidays and coronavirus, which, alongside weaker freight, pressured cash premiums lower.

The Agricensus APM-6 CFR China marker for March shipment out of Brazil fell to 143 c/bu over March futures last Friday, equating to $373.75/mt, down more than 4% from the previous assessment.

The market expects premiums for Brazil to fall further across the curve on Monday with March shipment indicated around 138 c/bu over March futures – the lowest level since mid-November last year.

Crush margins remained healthy thanks to lower CBOT soybean futures and cash premiums.

Based on Agricensus calculations, gross margins for March shipment were at $18.65/mt, while margins for May and July shipment both stood near $20/mt.