Soybean meal weakness to persist in July as supply builds

In the first half of 2026, domestic soybean meal spot prices were repeatedly hit by unexpected events, causing sharp fluctuations. However, the prices ultimately returned to a downward channel under the dual pressure of ample supply and weak demand.

Entering June, the domestic soybean meal spot market completely shifted to a supply-driven rhythm. The core trading logic focused on sustained inventory pressure brought by high operating rates and high port arrivals.

According to Mysteel's survey, the soybean port arrivals in China in June exceeded 10 million tonnes. In July 2026, soybean arrivals of Mysteel's full-sample domestic crush plants are expected to reach 163.7 vessels based on shipping fixture, equivalent to approximately 10.6405 million tonnes. In addition, August 2026 soybean arrivals are projected at 10.5 million tonnes, and September arrivals at 9.3 million tonnes. Raw material supplies are extremely ample, and crushers remain highly motivated to operate, with the national average operating rate now steadily above 60%, rebounding significantly from earlier lows of merely 40%.

With supply continuing to expand and downstream demand seasonally soft, China's soybean meal inventories have kicked off an accumulation cycle, completely reversing the destocking pattern seen at the end of the first quarter. Spot prices of soybean meal have been persistently suppressed, with June prices highly vulnerable to declines.

Focusing on East China, a key producing and consumption region, local crushers maintained high operating rates with ample feedstock supply. According to Mysteel's survey, the soybean meal inventories in East China have gradually increased from 311,000 tonnes on June 5 to 372,000 tonnes on June 26. Compared with the impact of maintenance disruptions in the north and high inventory pressure in the south, East China's inventory growth was steadier and more sustained, making local spot prices less flexible and generally following broader market moves.

In addition, the demand showed seasonal weakness, limiting spot rebounds. According to a survey of 50 sampled feed mills in major regions nationwide by Mysteel, as of June 26 (Week 26 of 2026), the national average physical soybean meal inventory at feed mills stood at 7.24 days, up 0.09 days from the previous period and down 0.51 days year-on-year. Current downstream feed mills' average inventories remain low.

While some feed mills are executing delivery contracts to boost physical stocks to safe levels, there is no sign of concentrated restocking or hoarding. Soybean meal turnover remains generally flat. Rigid demand provides a clear floor, but lacks the incremental support needed to lift the prices. As a result, spot prices are holding only modestly on regional spreads, with no breakout above overhead resistance.

In summary, the near-term soybean meal spot market is in a delicate balance between bullish and bearish factors.

Looking ahead to July, the market is expected to remain well supplied. High soybean arrivals will keep crusher operating rates elevated and inventories building. Regional spreads are likely to narrow again, with East China's price resilience gradually weakening. Overall, the market will continue to digest inventory pressure through rangebound trading, with no trend-based upside in sight.