Soybean meal prices decline profits decline China's soybean imports slow down

The price of soybean meal in Dalian, China, has fallen 6.7 per cent since the beginning of last week. This led to a negative squeeze in interest rates, ending a generally profitable pattern since early September. Soybean meal prices are likely to be very weak early next year, and the pace of China's soybean imports will slow.

Soybean meal prices decline profits decline China's soybean imports slow down

The decline in Chinese soybean meal prices threatened to disrupt the booming pattern of imports of American beans, as crushing profits began to turn negative. Most of the profits of domestic crushing plants have remained positive since the beginning of September.

Lucrative soybean crushing, coupled with a four-year low in CBOT soybean futures, spurred Chinese buyers to rush to order US bean shipments for November-December shipments last month. But expectations of large shipments hit soymeal prices, dragging down squeeze profits.

China accounts for more than 60% of global soybean trade.

A slowdown in China's soybean imports will depress global prices. Global soyabean prices rose to a four-month high earlier this month, spurred by strong demand.

There is no doubt that China has gone too far, and a large number of soybean shipments are on their way to China. Said the trade manager of a company in Singapore.

The decline in the price of soybean meal in the Chinese market will result in zero crushing profits or even losses.

Soybean meal prices in Dalian, China, have fallen 6.7 per cent since the beginning of last week. This led to a negative squeeze in interest rates, ending a generally profitable pattern since early September.

Chinese importers overbought soybeans at the end of last year, encouraged by higher squeezing rates. But record high imports and falling demand for soymeal after the bird flu outbreak have led to a number of defaults.

Traders say that despite falling prices and large shipments, China's current situation is not as good as it was last year.

China's soyabean imports are expected to hit about 21 million tonnes between November and January, but traders see faint signs of a slowdown early next year.

Usually, China imports 550-6 million tons of soybeans per month.

If the price of soybeans is at $9.00 per bushel, then the profit may be good, said an analyst at Grain, Oil and Feed Network in the world granary. But if it falls below that level and the price of Chicago soybeans continues to rise, profits will turn negative.

Soybean meal prices are likely to be very weak early next year. He said.

Another Singaporean trader said that this week, the FOB price of December soybeans was 127cents higher than the monthly CBOT1 contract, down from 205cents two months ago, suggesting a slowdown in demand.