Sinograin's second auction of imported soybeans on December 16 received a less enthusiastic response than the December 11 auction. The percentage of beans sold declined to 62% and the average price declined to RMB 3852 per metric ton. A cumulative 720,000 metric tons have been sold in the first two auctions.
Chinese commentary attributes the auctions to Sinograin's need to relieve storage pressure as large volumes of U.S. soybeans purchased are expected to arrive. It also cites a need to generate funds for purchases of American soybeans. The second objective will be challenging if Sinograin has to pay off loans that financed purchase of these soybeans at peak prices 2-to-3 years ago.
The next auction is scheduled for December 19 when 550,000 metric tons will be offered. The auctions are composed predominantly of soybeans imported during years of much higher prices in 2022 and 2023. Auctions of imported soybeans held in March also featured soybeans from 2022-23, but auctions held earlier this year during summer months offered beans from last year and this year.
The first two auctions in December featured soybeans stored in Shandong Province and Tianjian Municipality. Next week's auction will offer a larger volume of soybeans stored in Hunan, Liaoning, and Sichuan Provinces. Fewer soybeans are being offered in Shandong and none in Tianjin.
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