Soybean meal prices in China hit new lows

The Chinese soybean meal market continues to show downward momentum. Following a decline in both futures and spot prices yesterday, the decline has continued into the current trading session. In several regions, prices reached new lows, falling to 2,760 yuan per tonne, below the previous low of 2,780 yuan per tonne at the start of the year.

The average spot soybean meal price was 2,835 yuan per tonne, down 20 yuan from the previous day. In Jiangsu Province, prices ranged between 2,760 and 2,820 yuan per tonne, down 20-40 yuan from previous levels. In Shandong Province, prices were 2,820 and 2,880 yuan per tonne, down 20 yuan.

Pressure also remains on the futures market. On June 5, the most liquid September soybean meal contract (M2609) on the Dalian Commodity Exchange closed down 37 yuan. The contract opened at 2,943 yuan per tonne and closed at 2,918 yuan.

Market participants note that the current situation is causing serious concern, especially given the expected further supply growth. The main pressure factor remains the increased soybean supply from South America. China continues to receive large volumes of imported soybeans, while processing plant utilization remains high, contributing to increased meal production.

An additional negative factor for the market was the decline in US soybean prices. Favorable weather conditions and the rapid pace of the US soybean planting campaign have increased expectations for a bumper harvest, leading to lower global prices. The price of US soybeans fell from around 1,200 cents per bushel to less than 1,150 cents, reducing the cost of imported raw materials and increasing pressure on the Chinese domestic market.

Along with lower raw material prices, weak consumer demand persists. Feed mills and livestock farms continue to maintain a cautious purchasing policy. The expanding supply of alternative feed components is putting additional pressure on the market. In particular, batches of sprouted wheat are entering the market, and auction sales of targeted rice from state reserves and imported corn have resumed.

Under these conditions, most market participants are preferring to take a wait-and-see approach and closely monitor further developments.

At the same time, analysts note that the soybean meal market is traditionally highly volatile and can quickly react to changes in external factors. Price quotations could be supported by adverse weather conditions in producing countries, potential changes in trade policy, including discussions of additional import duties, and various geopolitical events that could impact the global oilseed market.

Therefore, despite the current extremely weak market sentiment, experts recommend remaining cautious in their forecasts and closely monitoring factors that could change the direction of price movements in the coming months.

Tags: China, prices, soybean meal