Core Viewpoint - The recent warming of China-Canada trade relations has led to a significant impact on the domestic soybean meal market, with expectations of reduced import tariffs on Canadian canola influencing soybean meal futures prices [1] Group 1: Market Dynamics - The soybean meal futures contract 2605 has been experiencing a continuous decline due to the anticipated reduction in import tariffs on Canadian canola, with the oil-meal ratio reaching a historical high of 2.95 [1] - The oil-meal ratio has averaged 2.26 since 2013, with a probability of being above 2.5 at 21.26% and below 1.9 at 8.99% [1] - The price drop in soybean meal is directly linked to the recent agreements between China and Canada regarding trade cooperation, particularly concerning canola imports [1] Group 2: Supply and Demand Factors - As of January 16, domestic soybean meal commercial inventory stood at 950,000 tons, marking a second consecutive week of inventory reduction [2] - The reduction in inventory is attributed to lower operating rates at oil mills and increased purchasing activity from feed enterprises ahead of the Spring Festival, with feed enterprise inventory days rising by 14% to an average of 12.84 days [2] - The anticipated decrease in imported soybean arrivals and a projected reduction in crushing volume to 8 million tons in January will likely maintain a tight supply of soybean meal in the first quarter [2] Group 3: International Market Influences - The South American region, particularly Brazil, is expected to see a significant increase in soybean production, which may exert downward pressure on soybean meal prices due to limited international demand [3] - Despite good demand, the overall inventory of soybean meal remains high, and the market has already priced in potential supply tightening from reduced soybean arrivals [3] - The upcoming dynamics of Canadian canola import policies and domestic Spring Festival stocking will play crucial roles in short-term price movements, while post-festival supply increases may pressure prices [3][4] Group 4: Future Market Outlook - The soybean meal market is expected to exhibit a "near strong, far weak" pattern, with short-term price recovery anticipated due to ongoing inventory reduction and delayed South American soybean harvests [4] - Post-Spring Festival, the influx of Brazilian soybeans and increased imports of canola and canola meal may pose challenges to soybean meal prices [4]