Trade war fears, tight stocks keep Chinese soymeal prices high: CNGOIC

Domestic soymeal prices in China were supported by market uncertainty even as fears of soybeans being caught in a trade war started to fade, the China National Grain & Oil Information Centre said in a weekly report Thursday.

While China’s commerce ministry has said it will not put imports of US soybeans on retaliatory sanction lists, fears were enough to provide support in the domestic soybean meal this week, CNGOIC said.

Seasonal maintenance at many Chinse crush facilities in March has also caused prices to increase, putting pressure on domestic meal stocks.

Meal stocks stand at 805,000 mt as of Wednesday, down 1,500 mt from last week and below the three-year average of 845,000 mt.

In the last week, 1.65 million mt of beans were crushed, the lowest level recorded in 2018, and down from the prior week’s crush level of 1.85 million mt.

Despite the reduction in crush activity last week, soybean stocks saw a decline for a third consecutive week as soybeans arrivals slowed down.

March arrivals were recorded at 5.8 million mt, but CNGOIC expects this to pick up in April and June, with arrivals expected to come in at 8.8 million mt and 9.5 million mt, respectively.

Soybean oil stocks also took a hit and were recorded at 1.41 million mt, down 20,000 mt in one month, but CNGOIC expects stock levels to improve as higher soybean arrivals are anticipated in April and June.