The "small peak" of grain sales may be wrong after the soybean market expectations have been disrupted

Special analyst Liu Congxin

【Main viewpoint】The surplus of soybean grassroots grain source in Northeast China is decreasing, and most traders have a bullish intention on high-grade and high-protein commodity beans in the future. Spring ploughing is imminent, the wrong "small peak" of grain sales or disrupt market expectations, and the soybean market in the north and south producing areas restricts each other, making the domestic soybean market weaken as a whole.

Affected by the continuous acquisition of enterprises in the Northeast soybean producing areas, the surplus of grassroots grain sources is decreasing day by day, because the purchase of enterprises is only limited to medium grain quality, and its pressure has been effectively alleviated, most traders have a bullish psychology on the high-grade high-protein commodity beans in the future. Spring ploughing is imminent, the wrong "small peak" of grain sales may disrupt market expectations, soybean farmers in the bullish voice again to sell at a high price, while traders hold the terminal circulation of commodity beans is decreasing, this weakening operation situation has frustrated the intention to raise prices and build positions.

The price of beans in the Guannai area has been continuously lowered, and the demand side has been lower than the same grain source of Northeast beans by 100~160 yuan/ton, and the mainstream market of commercial beans seems to be stable, but due to the normalization of downstream processing and the approaching summer harvest time, soybean farmers concentrate on selling grain, and the acquisition outlets around the country continue to compress, and the traders who purchase normally have to put pressure on prices. After the rapid adjustment of the price of "second-class grain", some protein companies have entered the market, but the State Reserve last week in Qingdao, Shandong, Xuzhou, Jiangsu, Luohe, Henan to adopt a two-way auction to auction the new, its new, old grain transaction price has complementary advantages, will replace the "second-class" bean source transformation in the customs, its market may continue to fall, there is still a drag on the price of commodity beans.

The pressure of "inward turning" in Northeast China has decreased

It is difficult to get sluggish and difficult to grow

With the continuous acquisition of enterprises, the surplus grain at the grassroots level in the northeast producing areas has been significantly diverted, and the medium-sized grain has entered the enterprises; high-grade commodity bean traders have also moderately increased their positions, although they cannot catch up with the positions held in the same period in the early years, but the market choice has been inclined to the customs inside, and the sluggish outgoing will make it difficult for the market to rise. The spring ploughing period is approaching, and in the face of the easing of pressure, a large part of the grassroots grain farmers are reluctant to sell again, wanting to postpone the grain source, so that the "small peak" of grain sales that should be normal will be staggered. The purchase price of grassroots gross grain rose slightly, while the terminal quotation of traders could not be supported, and the weak pattern was difficult to change in the short term. After this week, the spring ploughing in the Northeast will be in full swing, and the acquisition market will enter a semi-closed state one after another.

At present, there is an imbalance between the grassroots surplus grain areas in the northeast producing areas, the soybean agricultural grain sources in the eastern region of Heilongjiang are close to being sold out, while the central and western regions and the Inner Mongolia producing areas have lost pressure on the surface, but the market circulation has weakened significantly, and soybean farmers are affected by the bullish trend, and the purchase price remains stable by scattered sales, while the intention of traders to increase their positions is not obvious, and the grain sources that meet the purchase standards of enterprises continue to be diverted.

The phenomenon of "internal transfer" of the Northeast bean source will bring more uncertainty to the market outlook, and the rotation of grain by the State Reserve will continue to adopt the form of two-way bidding transactions in the future. In the future, once the spread widens at the floor price of new beans, the spread will be reasonably repaired, and the trading volume will increase significantly. Last week, the two-way bidding auction in the northeast producing area was fully unsold, and Qingdao, Shandong, Xuzhou, Jiangsu, and Luohe, Henan in the Guannai auctioned 13,427 tons of soybeans with two-way bidding for purchase and sales, and the result was that the shipment price of old beans produced in 2021 was 4,700 yuan/ton, and the purchase price of new beans in 2023 was 5,050 yuan/ton, all of which were sold. From the point of view of the transaction price, because the storage of new beans does not require protein content, the quality standard production area has sufficient spot supply and has a large profit margin, while the price of old beans has lost its advantage, and the main body of the auction still has income after complementing the interest rate difference, but selling old beans below the auction price will significantly inhibit the delivery of "second-class grain" to protein enterprises in the customs. At the same time, there is a probability of further downward adjustment of this kind of grain price in the customs, which makes it difficult for the price of commodity beans to stabilize. With the passage of time, when a large amount of regulated reserve grain will be auctioned in the first half of last year will be the biggest attraction of the bean market in the future.

The volume of outgoing beans from the northeast producing areas has declined across the board, and some merchants have not only not raised prices, but also made small concessions when large orders appeared, but the source of high-grade high-protein beans is still stable. At the end of last week, the mainstream loading price of 39.5%~40.5% protein content tower selection commodity beans was 4700~4800 yuan/ton, the loading price of 41%~42% protein content was 4840~4900 yuan/ton, the mainstream loading price of 42.5%~43% protein content was 4900~5100 yuan/ton, and the loading price of a single variety with higher protein content was 5200~5360 yuan/ton. It is still difficult for commercial beans with a protein content of more than 42% to rise in the short term, and it is expected that the impact of Kannai bean market on Tohoku will be extended to June-July.

Small households stop buying and large households receive

The market in the customs area stabilized slowly

After more than 20 days of rapid price reduction, the price of "mixed flower beans" in Jiangsu, Shandong, Henan and Anhui beans has highlighted its advantages compared with the price of Northeast beans flowing into the terminal. Rainy weather occurs from time to time, soybean moisture absorption and deterioration will be aggravated, and the summer harvest is getting closer and closer, and soybean farmers' reluctance to sell is fully relaxed. However, the decrease in the amount of outgoing has caused many small and medium-sized households to lose money because they cannot keep up with the pace of adjustment, and the main body of the suspension and abandonment of harvest has increased, and the choice of soybean farmers to sell grain is narrower, and a small number of outlets have concentrated on normal purchases, and the pressure has risen, prompting buyers to further pressure the purchase price while improving the quality.

The price of various producing areas in the customs has been high in the early stage, coupled with the mismatch of quality, the terminal market is occupied by the quality and price advantage of Northeast beans, and the grain source is affected by the specific natural environment, and the recent sharp decline is expected. Due to the speed of adjustment is too fast, it is impossible to have no price difference between regions, and the phenomenon of ups and downs will continue in the short term, and the price of high-grade commodity beans seems to have bottomed out, but the price of "second-class grain" is affected by the Northeast aged beans that have entered the market and the auction reserves of the State Reserve, which will inhibit its total outflow. The purchase price to stabilize may be lowered again, or it may be a drag on the price of commodity beans.

The price of "mixed flower beans" in Anhui has become a reference value in Suzhou, Shandong and Henan bean areas. At the end of last week, Anhui Fuyang, Bozhou, Suzhou 42% protein content of ordinary sieved grain loading price 4700 ~ 4760 yuan / ton, double gravity sieved grain to 4800 ~ 4900 yuan / ton accounted for the mainstream, some areas more than 43% of the high protein varieties loading price 5000 ~ 5040 yuan / ton; There are still obvious differences in the loading price of different regions depending on the quality, mostly between 4800~5000 yuan/ton; Anhui and Jiangsu "secondary beans" are basically on the same "starting line", the purchase price of gross grain is 4100~4300 yuan/ton, and the net grain loading price is 4500~4600 yuan/ton.

Shandong bean area affected by the periphery, the market recognized garlic stubble grain source in the main producing areas of Jinxiang, Yutai, Wenshang and other places, last weekend loading price has reached 4900 ~ 4960 yuan / ton, other regional prices also followed. Henan Xuchang, Zhoukou, Luohe, Zhumadian, Yongcheng and other bean areas of the main body of grain once thought that the quality of grain less, and the current price has been inadequate, had to accept the impact of the external downward trend, 4800 ~ 4900 yuan / ton of loading quotation and the periphery close. The inbound price of "second-class grain" protein enterprises is 4750~4780 yuan/ton, and the loading price is mainly 4460~4500 yuan/ton.

Anqing in southern Anhui in the Yangtze River basin is more than a month away from the summer harvest, many outlets still have a large number of grain sources are difficult to send, the quality is quite different from the grain sources in Huaibei, because they are all high-priced grains hoarded in the early stage of listing, the loss area continues to amplify, the current price is 4700 ~ 4800 yuan / ton, only sporadic outgoing; Hubei and northern Hunan bean area "mixed flower beans" loading price 5700 ~ 5800 yuan / tons, most of them are the early inventory of grain, and the buyer has a heavy loss, but compared with the peripheral production areas, the price difference is nearly 1,000 yuan, and the market acceptance is low. With the summer harvest approaching and the sharp decline in circulation, if the grain sources in Hubei and Xiangbei bean areas do not adjust the price as soon as possible, it is expected that some bean sources will be pushed to the market of new beans and it will be difficult to sell out.

Terminal consumption is in the off-season

Loose supply suppresses the market

The climatic characteristics of spring in the south are becoming more and more present, the shelf life of soy products is significantly shortened, and all kinds of vegetables are cheap and abundant, and the supply of meat, eggs and poultry is abundant, so that residents can choose more space for life and various canteens. This year, the production of soybean products has decreased significantly in third-tier cities, while the first- and second-tier cities have remained stable for two consecutive months due to the trend of influx of employed people, but the current processing volume has shown a slight downward trend. It is expected that after May Day, the conversion volume of soybean products will fully enter the normalized off-season.

The stable and weakening market in the Northeast production area and the sharp decline in prices in the customs area have made the terminal operators reluctant to increase inventory, and the wait-and-see atmosphere has intensified. The distribution price of imported U.S. Gulf soybeans has been significantly reduced under the influence of the current price of domestic soybeans, and has been gradually adjusted downward. From January to April, the overall operating rate of protein companies declined, the product inventory in the industry was large, and the product prices continued to decline under the influence of selling pressure in order to seize market share in the same industry.

At present, Russian soybeans arrive less in Hong Kong, after the May Day holiday, a large number of beans will arrive in Hong Kong, due to the increased pressure on Russian soybeans, the price of soybeans in the future has to be adjusted downward, from mid-May to late June, there are signs of a significant increase in arrivals, or have a certain impact on the domestic soybean market.

On April 9, the National Grain Trading Center planned to auction 506,000 tons of imported reserve soybeans produced in 2021 and 2022, with a starting price of 3890~4030 yuan/ton, and all the results were unsuccessful; On April 16, the National Grain Trading Center continued to auction 505,000 tons of imported soybeans produced in 2021, 2022 and 2024, involving the target Shandong, Hebei, Tianjin, Liaoning, Hubei, Hunan, Sichuan, Zhejiang, Fujian, Guangdong, In Guangxi, the scope of the auction is larger than before, but in view of the domestic demand for oilmeal from strong to weak, the auction reserve price may be moderately lowered.

Whether domestic soybeans or imported soybeans, the country has a large number of grain reserves, the supply gap can be adjusted at any time, with the steady increase in the arrival of imported soybeans in the next few months, oil, meal will enter the stage of rest. The spot supply of raw materials for soybean product processing is sufficient, and the mainstream market will fluctuate little in the future. (This article was originally published in the A03 edition of the Grain and Oil Market News on April 16, 2024)