Frost strikes, domestic soybean supply faces new uncertainties, prices are expected to rise

Summary: Frost strikes and affects soybean supply, prices are expected to rise

At present, soybeans in China's main soybean-producing areas in Northeast China have gradually begun to be harvested, but disasters have come one after another. On the 9th, affected by cold air, the Hulunbuir region suffered frost damage, which affected soybean maturation. The impact was even greater on some late-maturing or late-sown soybeans. These soybeans were in the middle and late stages of grain development. Freezing damage caused leaf damage and loss of later photosynthesis. Some media estimate that the yield reduction could reach around 15%. For domestic soybeans, whose supply is already weak, prices are even more worth watching for an upward trend! However, Science Agriculture does not think soybean prices can rise to 2 yuan this year, or rather the probability of that is very small or even nonexistent.

It is indeed true that soybeans in Northeast China encountered frosty weather this time, and according to forecasts, Inner Mongolia today (the 11th) still has rainy weather in soybean areas and some regions, accompanied by strong winds. As for the recent climate in Northeast China, affected by the clash of cold and warm air, the frequency of precipitation is also relatively much higher. The impact on late-maturing and late-harvested soybeans is considerable.

However, while paying attention to this news, we should also note that China's soybean market is no longer the pattern dominated by Chinese soybeans as it once was. Looking at soybean production in 2017, China's soybeans were only more than 13 million tons, while imported soybeans reached 95.53 million tons. In other words, China's soybean market is basically completely dominated by imported soybeans. In terms of prices, even though China's soybean supply is so tight, China's soybean prices have not soared. Instead, with the increase in international soybean supply, China's soybean prices have gradually aligned with international levels from the previous level above 2 yuan.

Therefore, looking at this year's situation, affected by the reduction in imported soybeans, soybean prices are indeed worth expecting. Last year, many institutions predicted that China's soybean demand this year would be around 110 million tons, but according to estimates by Chinese media, China's soybean imports this year will be roughly around 85 million tons, while according to the Chinese imported soybean demand figure released by the U.S. Department of Agriculture the day before yesterday, it is roughly 94 million tons. From the above aspects, no matter which institution it is, all have a relatively full understanding of the shortage in China's soybean supply this year. And at least for now, this cannot be solved very easily.

At present, China's soybean imports are gradually shifting from the previous United States to Brazil, but after lacking the United States, a major supplier, China's soybean imports have still been considerably affected. This is also a major reason why everyone is relatively optimistic about higher soybean prices this year.

The reason why it is said that soybean prices will find it difficult to climb to the 2 yuan level this year also still comes from foreign imported soybeans. After imposing tariffs on U.S. soybeans, the landed price of U.S. imported soybeans is around 3,900 yuan per ton, which converts to 1.9 yuan per jin. If domestic soybean prices in China soar to a high level above 2 yuan, then domestic grain-using enterprises will once again turn to purchasing U.S. soybeans.

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