China's Soybean Prices Hit New Highs

Soybean prices in China have seen a sharp rise, fueled by the USDA’s latest report on U.S. soybean production and stock levels. The report revealed lower-than-expected production due to late-season dry weather, tightening supplies and driving up prices for soybeans and soybean oil worldwide.

On the Dalian Commodity Exchange, soybean meal futures increased by 3.2% to USD 0,37 per kg, marking their highest level since July 2023. Soybean oil futures also climbed by 2.5% to USD 1,06 per kg, reflecting robust global demand and tightening supplies. These increases align with global trends, as soybean oil futures on the Chicago Board of Trade (CBOT) surged by 6.6% last week. The bullish trend highlights concerns over dwindling supplies and strong market demand.

Record Imports and Global Supply Concerns

China’s record soybean imports in 2024, totaling 105.03 million tonnes, have played a critical role in ensuring stable domestic supplies amid rising geopolitical tensions with the U.S. Importers accelerated purchases ahead of potential disruptions, boosting trade volumes.

The USDA’s report also cut estimates for U.S. soybean production, further tightening global supplies. Additionally, adverse weather in major producing countries like Argentina has added to supply worries, keeping the market on edge.

China’s strong appetite for soybeans remains a key driver of global prices. The country's demand continues to bolster prices across major commodity exchanges, including Chicago and Dalian.

Temporary Market Slowdown Ahead

As China prepares for the Spring Festival holiday from January 28 to February 4, market activity is expected to slow temporarily. However, analysts suggest that soybean prices will remain supported due to tight global supplies and sustained demand. Weather developments in key producing countries and geopolitical factors will likely influence soybean prices, keeping the market closely watched by traders and importers alike.





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