On Tuesday, China’s soymeal and rapeseed meal futures fell to their lowest levels in more than a year, driven by high inventories and expectations of abundant supplies. On the Dalian Commodity Exchange, the most active soymeal futures contract dropped 3.46% to 2,877 yuan ($401.07) per metric ton, marking its lowest closing price since July 10, 2023. Similarly, rapeseed meal futures on the Zhengzhou Commodity Exchange fell 3.93% to 2,175 yuan ($303.20) per metric ton, the lowest since March 31, 2023.
Analysts report that China’s soybean inventories are significantly high, with large volumes arriving at ports. The soybean meal inventory at major domestic oil mills has reached 1.45 million tons, an increase of 560,000 tons compared to the same period in 2023, and 470,000 tons above the average of the past three years.
The Chinese agriculture ministry has also raised its forecast for soybean imports in the 2023/24 crop year to 98.37 million metric tons, reflecting a 2.27 million ton increase from previous estimates. As the world’s largest soybean importer, China purchases soybeans primarily for meal production for animal feed and oil for cooking.
Crushers have increased their purchases recently due to lower global prices, which have reduced import costs. However, this has led to an oversupply of beans amid subdued demand for animal feed. The U.S. Department of Agriculture has projected a record soybean crop for 2024/25 at 4.589 billion bushels, contributing to higher end-stocks forecasted at 560 million bushels.