This year, spot soybean meal prices have risen 23.7 percent year-on-year. Since mid-August, the domestic downstream industry's National Day stocking market has started, and the spot price of soybean meal has continued to rise. The price in some areas has exceeded the 5200 yuan/ton mark, setting a new high in the past 10 years.

The rise in domestic soybean meal stems from further tightening of supply on the cost side. The latest supply and demand report of the U.S. Department of Agriculture lowered the planting area, harvest area, yield, crushing volume, export volume and final inventory of U.S. soybeans. Among them, the final inventory of U.S. soybeans in 2022/23 was lowered by 45 million to 0.2 billion, the lowest level in 7 years. At present, the stock of soybean meal in major domestic oil plants is 460000 tons, down 56% year on year.

September-October to Hong Kong soybean due to the early oil plant losses after the slow pace of buyer procurement, the number of soybeans to Hong Kong is at a low level, the soybean meal produced by its use in pressing will not be as strong as the downstream feed farming enterprises to pick up the demand, soybean and soybean meal stocks are at a low level, the situation of short supply will be more prominent. Between the near future and the end of the National Day holiday, many oil factories will have a shortage of beans or a reduction in production, as well as a shutdown and a holiday during the National Day holiday. The continuous decline in soybean meal stocks and the pullback in soybean oil prices have supported the oil factories to support the price of soybean meal and accelerated the spot rise. Affected by this, the price of domestic soybean futures has recently risen by 100 yuan per ton to 6034 yuan/ton, with a good rise.

1, inventory fell by 56% year-on-year, soybean meal center of gravity or will still shake up

The rise in soybean meal prices stems from further tightening of supply on the cost side. On September 12, the U.S. Department of Agriculture's supply and demand report lowered the planting area, harvest area, yield, crushing volume, export volume and final inventory of U.S. soybeans. Among them, the final inventory of U.S. soybeans in 2022/23 was lowered by 45 million pu to 0.2 billion pu, the lowest level in 7 years.

Rising soybean prices have slowed domestic imports significantly. In early September, data released by China Customs showed that China's soybean imports in August were 7.17 million tons, down 24.5 per cent from a year earlier, the lowest level since 2015. From January to August, China imported 61.33 million tons of soybeans, down 8.6 percent year-on-year. In addition, last week, the national port soybean inventory was 5.8785 million tons, down 1.1676 million tons from the previous week, a decrease of 19.86 percent, and a year-on-year decrease of 1.836 million tons, a decrease of 22.8 percent.

Due to the low volume of soybeans to Hong Kong, the decline in soybean inventories, combined with high profits from pig farming, self-breeding and self-breeding heads are profitable to break thousands, directly driving the increase in demand for soybean meal, resulting in oil factory soybean meal inventories fell to historically low levels. According to data from the National Grain and Oil Information Center, as of September 19, the soybean meal inventory of major domestic oil plants was 460000 tons, a decrease of 50000 tons from the same period last week, a decrease of 240000 tons from the same period last month, and a decrease of 590000 tons from the same period last year. It reached 56%, a decrease of 500000 tons from the average value of the same period in the past three years.

Benefiting from the continued upward trend in soybean meal prices, soybean meal ETFs have risen significantly, up nearly 45% so far this year. As of the close of trading on the 22nd, the cumulative net value was 1.7467, continuing to rank first in the growth of domestic ETF funds. Soybean meal ETFs, as a member of commodity ETFs, are highly correlated with the soybean meal futures price index they track.

2, the market will continue to rise or stabilize?

Recent domestic soybean meal spot prices have soared, the market for the late market view is worth paying attention. Looking ahead to the market, soybean meal market will continue to rise or stabilize?

According to the survey conducted by the Mysteel agricultural products team on market changes, on the whole, due to the recent shortage of soybean meal spot and the superposition of the approaching National Day, feed enterprises and breeding enterprises with low inventory are eager to stock up, and the spot market quotation has risen sharply. In the whole sample, the bullish proportion of the domestic soybean meal spot market next week also increased to 71%, up 69.56 from the previous week, accounting for the largest proportion. The number of people looking at consolidation ranked second at 24%, a decrease of 11 sample points, or 29.73, compared with last week's consolidation, while another 5% of the sample points believed that the soybean meal market would fall next week, 21 fewer than last week's bearish sample points, the decline was 77.78 percent.

Separately, the oil plant side for the soybean meal after the market bullish proportion of the largest, for 91%. Then the stable ratio is 9%, the bearish ratio is the lowest, and the non-oil mill people in the sample point believe that the spot soybean meal will fall in the future. Specifically, oil plants in East China, Shandong, North China and other markets, taking into account the estimated decrease in soybean arrivals in October and the continuous improvement in downstream demand in the later period, believe that the soybean meal market is still mainly rising in the later period, and there is still room for further rise near October.

As for feed enterprises, the future soybean meal market is still bullish, accounting for 51%, followed by 39% for consolidation. In addition, only 10% of the samples believe that the price of soybean meal will fall in the future. Compared with the 27% bearish and 30% bullish situation in the feed enterprise mentality survey last week, the change in the later soybean meal market mentality of feed enterprises is more obvious, mainly because farmers support prices, slaughterhouses have increased their purchases before the National Day holiday, and pig prices have also risen slightly. Feed mills are also optimistic about the demand for soybean meal in the later period.

As for traders, the bullish proportion of soybean meal market this week also increased by a large margin. This week, the bullish proportion of soybean meal market accounted for 71%, bearish traders accounted for only 3%, and the consolidation proportion was 26%. This week, the mentality of traders changed more obviously. Under the circumstances that oil factories in various regions have introduced limited delivery and oil factories have serious pressure on cars, soybean meal supply is very tight. Under the pressure of rising spot prices, traders believe that soybean meal spot is still easy to rise and difficult to fall in the later period.

"October-November may become the most tight moment for soybean supply. Overall, the cost side of supply tightening, domestic supply and demand are supported, soybean meal center of gravity or will move up the shock." Relevant reports believe that the domestic downstream 11 stock will continue, while the devaluation of RMB will increase the import cost of oil plants. In the fourth quarter, soybean meal will continue to show a state where the increase in demand is greater than the increase in supply. Then soybean meal stocks will further decline. Under the state of high basis and low inventory, the mentality of oil plants to support prices will remain unchanged, and the pattern of short-and medium-term soybean meal near strength and far weakness will continue.