Summary: China’s “spot” soybean crushing margin today was 106 Yuan/MT, up from last week’s 75. However, the “forward” margin was 2 Yuan/MT vs last week’s 82 Yuan/MT. The forward margin was 45 Yuan above what it was a year ago. Three months ago, the forward margin fell to its lowest level in 4 years. In the USDA’s December WASDE, the projection for 2018/19 was left unchanged at 90 MMT. Also, China’s own government-issued monthly S&D report pegged imports at just 83.65 MMT. If China does make purchases of US soybeans for delivery in 2018/19, we believe that USDA will reflect that in the January WASDE.
Today, the estimated crush margin for imported soybeans “spot” delivery in China was 106 Yuan/MT (see red line in chart below). That was up 31 Yuan from last week.
The crush margin for beans for “forward” delivery was 2 Yuan/MT (see blue line in chart above). That was down 80 Yuan from a week ago. But, the forward margin was 45 Yuan above what it was a year ago. Three months ago, the forward margin was lowest since Mar 2014.
Above is a chart that shows the soymeal price used to calculate the crush margin. Soymeal’s price was unchanged from a week ago after it plummeted 5.3% in the previous week. Below is a chart that shows the soyoil price that was used to calculate the crush margin. Soyoil’s price dropped 5.3% from last week. Today, soyoil’s price set a new 9 year low.
The chart below shows import margins for soy oil (see red line) and palm oil (see blue line). China is the world’s second largest importer of vegoil. The soy oil import margin was –931 Yuan/MT. This was down 189 Yuan from a week ago. Ten months ago was the lowest import margin in over 4 years. The palm oil import margin was -126 Yuan/MT. That was down 168 Yuan from a week ago. Palm oil import margins are usually negative but over the last two years imports have been profitable more frequently.