Demand keeps Chinese soybean meal stocks at three-year low

Strong domestic demand and a slow pick-up in the pace of crushing have kept Chinese soybean meal stocks remain at three-year lows, the China National Grain & Oil Information Centre said Thursday.

Chinese soybean meal stocks increased on the week but remain at a three-year low as domestic soymeal demand remains strong with crush gradually picking up, the China National Grain & Oil Information Centre said in a weekly report Thursday.

China crushed 1.82 million mt of soybeans in the week to March 20, slightly higher than the 1.8 million mt crushed the week before but below the pre-Chinese New Year level of 2 million mt level, data from the CNGOIC showed.

Soybean meal stock levels only saw a gradual increase of 100,000 mt on the week to 820,000 mt, a three-year low for this time of year, as domestic demand for soymeal remains fierce, keeping meal prices supported.

However, the CNGOIC cautioned on the buying spree as it expects buyer’s stocks to soon reach their limit, with a possible decline in domestic meal demand and prices as a result.

But at the same time, the centre expects domestic crush to drop below the 1.8 million mt a week rate, as crushers will go into maintenance in March, tightening domestic availability of meal.

With the current crush rate still buoyant, soybean stocks declined for a second consecutive week, down 420,000 mt on the week to 6.04 million mt.

Despite this, the figure remains at a comfortable five-year high for the time of year.

The CNGOIC expects total March soybean arrivals at 6.5 million mt with April arrivals expected higher at 8.5 million mt, with the majority coming in the second half if the month.