Soybeans CFR China price hits 8-month low on coronavirus worries

Singapore — Front-month soybeans on a CFR China basis hit an eight-month low of $383.05/mt on Tuesday, as assessed by S&P Global Platts, on fears the coronavirus outbreak will reduce Chinese demand.

Chinese soybean crushers are concerned about a potential slowdown in domestic soybean meal sales as less pork was consumed during Chinese New Year because people avoided public places out of fear of contracting the virus.

At the same time, many rural areas of China have started blocking all the roads to prevent unnecessary movement of people as ordered by local governments to prevent the spread of the virus. As a result, rural pig farms are having difficulty transporting their animals to potential buyers.

"The Chinese government just extended the Chinese New Year holiday in an attempt to prevent a large movement of people after the Chinese New Year festivities. A result of this will be a further dampening of soybean demand in China as Chinese crushing plants will either continue crushing lower volumes or remain closed for the [extended] holiday," a trader said.

Market participants calculated, so far there are plenty of soybeans stocks available in China of about 8 million mt available for crushing. "Chinese soybeans buyers will likely to stay cautious for the next following weeks as there are enough soybean stocks for them to crush at the moment," a source said.

Dalian soybeans, soybean meal and soybean oil futures will not reopen again until Monday due to the extended holiday.