Soybean meal market: stock market starts quietly-soybean meal price

Recently, due to the dual-factor resonance of the landing of the Fed's interest rate raising boots and the strengthening of RMB depreciation expectations, funds poured into commodities with a huge decline, and the soybean meal 1605 contract effectively broke through the upper edge of the previous oscillation range. With the intervention of pre-festival traders to prepare goods, soybean meal is expected to rebound strongly before the Spring Festival.

The Federal Reserve raises interest rates and sets the tone for rising commodities.

After the Fed raises interest rates, the strength of the US dollar will become a trend, and non-US currencies will be weak. in this case, the depreciation pressure of the RMB against the US dollar will further increase. As far as the domestic futures market is concerned, the devaluation of RMB will support domestic commodity prices directly and indirectly. Among them, the direct aspect is mainly reflected in the increase in the import cost of most of the bulk raw materials that need to be imported, while China's soybeans are mainly imported from overseas. If the RMB continues to depreciate at this time, the decline in commodities may stagnate or slow down, and when denominated in RMB, the depreciation of the local currency will raise the center of gravity of the internal and external price ratio, thus supporting the domestic commodity market.

The spot price of soybean meal moves up slowly.

As of December 21, the price of 43% protein soybean meal in Shandong Rizhao oil plant was 2570 won 2590 yuan / ton, up 10% 20 yuan / ton compared with last weekend. The price of 43% protein soybean meal in Tianjin oil plant was 2530 yuan / ton, which was the same as last weekend. Qinhuangdao oil plant 43% protein soybean meal price was 2540 yuan / ton, unchanged from last weekend. The price of 43% protein soybean meal in oil plants in Lianyungang region of Jiangsu Province was 2640 yuan / ton, up 50 yuan / ton from last weekend; the price of protein soybean meal in 43% oil plant in Dongguan area of Guangdong Province was 2540 million yuan / ton, up 10-30 yuan / ton from last weekend; and the price of 43% protein soybean meal in Fangchenggang oil plant in Guangxi was 2460 won 2520 yuan / ton, up 40 yuan / ton from last weekend.

As of November 2015, the stock of fertile sows was 38.25 million, down 12.4 per cent from the same period last year, and the stock of live pigs was 388.06 million, down 10 per cent from the same period last year. Although the year-on-year data is still declining, the year-on-year decline has narrowed significantly, and the number of live pigs has also stopped falling after setting an eight-year low. At present, the two major indicators that reflect the prosperity of the breeding market are at a relatively low level in history, which means that the consumption of feed and feed raw materials in the pig breeding market has slowed down. the situation of domestic pig breeding industry has not been substantially restored and improved. It will take time for the breeding market to recover, and consumption in the end market is still poor.

According to the price comparison relationship between pig stocks and pork prices, the decrease in pig supply in 2015 did not promote a sharp rise in pork prices, on the one hand, because of the sale of frozen pork reserves in China; on the other hand, because of the popularization of the concept of health, the dietary nutrition of residents tends to reduce red meat and increase the lifestyle of green leafy vegetables, which reduces the demand for pork and indirectly affects the recovery of live pigs. And the stock of breeding sows is also at the bottom, resulting in a reduction in the source of piglets. As a result, pig stocks are not expected to pick up significantly next year, and the effective demand for soybean meal will not grow.

Sufficient supply of raw materials to suppress the futures price of soybean meal

Customs data show that from January to November this year, China imported a total of 72.573 million tons of soybeans, an increase of 9.701 million tons or 15.42 percent over the same period last year. Imports are expected to reach 8.1 million-8.4 million tons in December, and China's soybean imports are expected to reach 80.673 million tons for the whole year, an increase of 13 percent over last year and a record high. In the past, the main reason for the increase in soybean imports in China was the increase in the demand for protein meal, but since 2015, the stock of live pigs in China has dropped sharply, the demand for soybean meal has weakened, and the pattern of strong meal and weak oil has completely changed. Oil factories are more willing to sell soybean meal at a reasonable price. Therefore, in the long run, the weak pattern of soybean meal will continue.

To sum up, although there has been no substantial change in the supply and demand side of the soybean meal market, which is destined to maintain a weak pattern for a long time, in view of the relatively strong capital side and the landing of the Fed's interest rate raising boots, soybean meal is expected to have a considerable rebound before the Spring Festival. Operationally, it is recommended that more orders can continue to be held, and traders can actively price the sales contract of soybean meal in January.