Bottom Line: China crush margins have fluctuated above and below break-even for the last few weeks. This week, both the “spot” and “forward” margins show a small profit. The “spot” crush margin rose 52 Yuan and is now above break-even at +53 Yuan/MT. The “forward” margin increased 20Yuan/MT and is +7 (also well above the 3-year low it set a month ago). Ship lineups indicate that China’s monthly imports are expected to decline in Aug-Sep and annual imports and could fall a bit short of meeting the USDA’s projection of 91 MMT (up 2 MMT from its previous projection).
The estimated crush margin for imported soybeans “spot” delivery in China today was +53 Yuan/MT (see red line in chart below). That is up 52 Yuan/MT from a week ago. Eight months ago, the spot crush margin set a 2-year high.
The crush margin for beans for “forward” delivery today was +7 Yuan/MT (see blue line in chart above). That is up 20 Yuan/MT from a week ago. This is much better than the 3-year low of -243 Yuan that was set a month ago. The forward margin is also 7 Yuan/MT above what it was a year ago.
Above is a chart that shows the soymeal price used to calculate the crush margin. Soymeal’s price today was up 1.1% from a week ago. Below is a chart that shows the soyoil price that was used to calculate the crush margin. Soyoil’s price today was down 0.5% from a week ago. Eight months ago, soyoil set a new 3-year high.
The chart below shows import margins for soyoil (see red line) and palm oil (see blue line). China is the world’s second largest importer of vegoil. Today’s soyoil import margin was -608 Yuan/MT. This is down 110 Yuan/MT from a week ago. Today’s palm oil import margin was -74 Yuan/MT. That is down 78 Yuan/MT from a week ago. Palmoil import margins are rarely positive.