Chinese soymeal stocks 13% down year-on-year

Soymeal stocks in China stand at 720,000 mt, down 13% on this time last year, a weekly update from the China National Grains and Oil Information Centre showed Thursday.

The stocks are 10,000 mt down from where they were prior to Chinese New Year celebrations, but fall short of the 830,000 mt levels where they were at this point last year.

The CNGOIC reported last week’s crush level at 1.5 million mt.

The run-down in stocks come at a time when prices of soybean have been spiking globally as production estimates in Argentina have been cut by both private and public analysts on a weekly basis due to dry weather.

Nevertheless, Chinese buyers have been active in the market, snapping up cargoes out of the Pacific Northwest at around 145 cents over July futures, but have struggled to source more prompt material.

In Brazil, heavy buying by Cargill and other traders has seen prices for April loading rise from 50 cents over May futures a week ago to 65 cents over May futures on Wednesday.

Higher soybean prices have in turn pushed up domestic Chinese meal prices to their highest level this year, according to the CNGOIC.

The highest prices were reported in the east and north-east, with range reported at 3,200 – 3,340 RMB/mt ($472.56/mt - $526.12/mt) and 3,000-3,060 rmb/mt, respectively.

On average, soymeal prices moved up 150-200 rmb/mt, over the past week, the CNGOIC said.

Chinese crush activity was depressed with larger players out of the market for Chinese New Year, which saw soymeal stocks fall.

The holiday period also saw a slump in the number of arriving vessels in February, the CNGOIC reported, with only 5.5 million mt landed in February and remain on the low side for March, with the expected number at 6.5 million mt so far.

Arrivals are set to go up, with April line ups expected at 8.5 million mt.

Soybean oil production also declined over the past two weeks due to the reduction in crushed volumes, with storage reported at 1.43 million mt, as of Wednesday, down 70,000 mt on the week but well up from the three-year average of 870,000 mt.

The storage level this time last year was 1.17 million mt.