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Market for Chinese Main Agricultural Commodities on April 10th

2018-04-10 www.cofeed.com
    Today(on April 10th), trends for Chinese animal and plant protein, oils & oilseeds and grains are shown as follows: 

Plant protein: 

    Daily review on soybean meal: US soybean prices continued to rise last night, accordingly, soybean meal futures today on Dalian Commodity Exchange fall impressively after low open, with which domestic soybean meal spots are also weighed down, yet turnover turns light. Soybean meal prices in coastal areas range from 3,300 to 3,380 yuan/tonne, a drop of 10-60 yuan/tonne against yesterday (Tianjin prices 3,380 yuan/tonne, Shandong 3,300-3,320 yuan/tonne, Jiangsu 3,280-3,350 yuan/tonne, Dongguan 3,300-3,380 yuan/tonne, Guangxi 3,380-3,400 yuan/tonne). President Xi Jinping said China will take the initiative to expand imports, significantly lower the import tariffs for vehicles and strengthen protection of intellectual property rights in his keynote speech at the opening ceremony of the Boao Forum for Asia Annual Conference 2018 on Tuesday. Xi's statements are basically in response to concerns about the trade spat, and the market believes that a negotiation on bilateral trade will probably be reached, in consequence, Dalian meal tumbles drastically after 10 o’clock this morning. Stockpiles of soybean meal have actually risen to 0.82 Mln tonnes by 6% on the week with the help of gradually lifted operation rate in oil mills when soybean crush is good and arrivals for imported soybeans in the second quarter are seen large, but on the other hand, slack demand for soybean meal due to great losses in pigs and poultry industry have already contributed to overflowing soybean meal and a machine halt in some Rizhao and Jilin mills. Price upside of soybean meal mainly depends on the trade tension instead of fundamental factors. That accounts for the decline of soybean meal prices when there is a hope of negotiation on the trade spat. A pronounced setback of Argentina's soybean production, unfavorable weather for US soybean planting and uncertainties in the trade spat plunge speculators to be cautious about short selling, such being the case, soybean meal for the time being remains strong and is limited to fall a lot amid crushers’ support for the prices. Wisely, market players had better take long upon bargain buying or stand by if they have stockpiles at hand.  

    Daily review on imported rapeseed meal: today, imported rapeseed meal prices down, among which prices in coastal areas stand at 2,610-2,750 yuan/tonne, some down 10-20 yuan/tonne (Guangxi stops to report; Guangdong offers basis 1809+0; Fujian 2,750 yuan/tonne). US soybean prices are generally bolstered as European buyers take the opportunity to buy US soybeans upon bargain buying and unfavorable cold and rainy weather in the central and western regions somewhat delays US soybean planting. But domestic meals are quite weak in fundamentals, especially when impressively low demand in end users due to great tumble in pig prices struggles with sufficiently large soybean and rapeseed arrivals at ports. Any price upside of rapeseed meal, if possible, comes from the trade tension rather than fundamental factors, therefore a declared initiative to expand export in Xi's speech in Boao Forum give great chance for a settlement of the trade spat. That also accounts for the decline of meal prices today though price downside is not much. Buyers are suggested to stand by for the moment. 

    Daily review on fishmeal: today, imported fishmeal price down, yet prices are negotiable upon transaction and shipments at ports are general. Northern ports: fishmeal price for Peru ordinary SD with 65% protein content are 11,900-12,200 yuan/tonne with a reduction of 100-300 yuan/tonne over yesterday; 12,800-13,200 yuan/tonne for Japanese SD with 67% protein content, falling100-300 yuan/tonne against yesterday; 13,200-13,400 yuan/tonne for super steam fishmeal with 68% protein content with a reduction of 100-200 yuan/tonne. Southern ports: fishmeal price for Peru ordinary SD with 65% protein content are 11,800 yuan/tonne, 12,700 yuan/tonne for Japanese SD with 67% protein content; 13,000 yuan/tonne for super steam fishmeal with 68% protein content, all down 200 yuan/tonne from yesterday. Port stocks: Hangpu has 36,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 26,000 tonnes, Tianjin 1,000 tonnes, Dalian 3,000 tonnes, Fangchenggang 1,000 tonnes, and other ports 4,000 tonnes. Fishing: till April 8th, about 55,970 tonnes of fish have been caught in southern Peru in A season of year 2018, accounting for 1.69% of total quota--3,316,700 tonnes--this season, among which 3,260,730 tonnes remain unfinished. Spots offers (FOB) in the outer remain stable, in detail, the fishmeal offer for ordinary SD with 65% protein content in Peru stays at USD $1,520 per tonne, USD $1,680 per tonne for super steam fishmeal with 68% protein content; the offer in Chile ordinary SD with 65% protein content is USD $1,700 per tonne, USD $1,800 per tonne for excellent fishmeal with 68% protein content. Holders at ports are strongly inclined to make shipments with their bearish attitude towards relatively large quotas in this new season. For the time being, fishmeal in market is expected to come down when market demand is not much overall. 

Oils & Oilseeds: 

    Daily review on soybeans: generally, soybean trade at Shandong ports is still stumbled when strict port inspections are under way, and meantime US soybean supplies are seen at Tianjin ports deficient. In April 4th afternoon, Beijing time, China announced its decision to slap 25% tariffs on soybeans, and as a result, US soybeans CIF to China ports price up substantially amid traders' strong inclination to hold onto goods for higher prices. All in all, imported soybeans are expected to go strong in a short term. The US is still in the publicity period, and whether the additional tariffs on Chinese products go into effect or not remains unknown until the public hearing on May 15th, yet China's proposed list for tariffs on US products will factor in the US next moves on the issue, 

    Daily review on oils: boosted by the technical buying and the new agreement on exports, US soybeans and soybean meal ended the trade session up last night, however, US soybean oil prices were mixed when active arbitrage of buying soybean meal and selling soybean oil battled with strong crude oil. Accordingly, oils on Dalian Commodity Exchange today open low and come off further, with which soybean oil and palm oil spots pare gains. In general, sales upon lower prices were good in yesterday's morning, but turnover are seen not much since yesterday's afternoon for most buyers prefer to stand by. Market calculates that China-US trade spate is probable to be settled as President Xi Jinping said China will take the initiative to expand imports, additionally the processing capacity is gradually improved based on good crush margins and large soybean arrivals in the second quarter, therefore oils in market are put in a bearish stance under such fundamentals. Yet, the setback of oils prices is just in reaction to the inflated bubble yesterday and even last week on account that pronounced decline of Argentina's soybean production, unfavorable weather for US soybean planting and uncertainties in the trade spat render speculators to be cautious about short selling, that is to say, oils for the time being remain strong and are not likely to fall a lots. Wisely, market players had better make proper replenishment upon bargain buying when prices go steady. Market attention should be paid to the USDA supply and demand report tonight for guidance though the report is expected to be neutral according to market. 

    Today's soybean oil: main prices for GB grade-one soybean oil in coastal areas stay at 5,830-5,950 yuan/tonne, falling 50-160 yuan/tonne (Tianjin traders offer 5,940-5,950 yuan/tonne, Rizhao traders 5,920 yuan/tonne, Zhangjiagang traders 5,920 yuan/tonne, Guangzhou traders 5,830-5,850 yuan/tonne). 

    Today's palm oil: 24-degree palm oil prices in coastal areas range from 5,130 to 5,250 yuan/tonne, falling 20-80 yuan/tonne (Tianjin traders offer 5,240-5,250 yuan/tonne, down 40 yuan/tonne; Rizhao traders stop to report; Zhangjiagang traders 5,200 yuan/tonne, down 20 yuan/tonne; Guangzhou traders 5,130 yuan/tonne; Xiamen traders 5,200 yuan/tonne, down 80 yuan/tonne). 

    Daily review on imported rapeseed oil: today, prices for imported rapeseed oil drop, among which prices in coastal areas are 6,410-6,460 yuan/tonne, down 20-30 yuan/tonne (Great Ocean in Fangchenggang, Guangxi offers 6,450 yuan/tonne; Fujian offers basis 1809-160; Fuzhiyuan in Dongguan, Guangdong offers 6,450 yuan/tonne, down 50 yuan/tonne). Oil futures are seen falling for China's initiative to expand export in Xi's speech give great chance for a settlement of the trade spat. Additionally, sufficient soybean and rapeseed at ports are not likely to boost rapeseed oil prices to a staggering degree. On the note, official news will carry weight on oils performance till the trade spat is finally settled, as a consequence, speculators dare not to short selling. On the whole, oils are probable to go strong and are hard to fall a lot. Wisely, buyers may as well stand by and take the USDA report for guidance. 

Grains: 

    Daily review on corn: today, part of domestic corn continue to price down. Corn buying prices in Shandong deep processors mostly stay at 1,850-1,940 yuan/tonne, some further down 6-20 yuan/tonne from yesterday, by contrast, purchasing prices in the northeast keep flat at 1,600-1,730 yuan/tonne. While purchasing prices offered at Jinzhou port, Liaoning are mostly pegged at 1,780-1,800 yuan/tonne (volume weight 690-700 g/L). Drying corn of Liaoning and Jilin at Bayuquan ports (moisture ≤ 15%, volume weight 690-700 g/L) are pegged at 1,780-1,790 yuan/tonne, basically unchanged from yesterday. Corn prices at Shekou port, Guangdong stay at 1,940-1,950 yuan/tonne, remaining flat over yesterday. Market sentiment is damped when a round of corn auction is started, accordingly, traders speed up corn shipments in panic, both of old and new corn, putting corn under considerable supply pressure. On the other hand, businesses in the downstream are inclined to stand by and are cautious about corn purchases, such being the case, corn prices for the time being fall further. It is said that old corn auctioned in the first stage is so poor in quality that some starch processing businesses and feed businesses could even not use it, whereas, rigid demand for high-quality corn still supports corn spot prices. Wisely, focus on corn auction and possible price premium should go forward for further market guidance. 

    Daily review on sorghum and barley: today, imported sorghum prices go steady where some ports price at 1,950-2,100 yuan/tonne (Tianjin offers 2,090-2,100 yuan/tonne, being flat; Qingdao 2,240 yuan/tonne; Nantong 2,080 yuan/tonne, up 20 yuan/tonne; Shanghai stops to report; Guangdong 1,950 yuan/tonne, being flat). At the same time, prices for imported barley keep firm, about 1,850-2,050 yuan/tonne at main ports (Qingdao 2,010 yuan/tonne; Nantong offers 1,940 yuan/tonne, Guangdong 1,840-1,850 yuan/tonne). Imports of sorghum from the US will fall impressively for the campaign of “anti-dumping and anti-subsidy” has been launched by China's Ministry of Commerce for American sorghum. And according to importers, sorghum imports in April are quite few the time import costs for sorghum and barley from Australia keep increasing in April and May delivery. Upside-down sorghum and barley prices are obvious factored in fundamental pressure and rising costs. News about corn auction prevails in the market, sending corn to a bearish side, in consequence, consistent falls of corn prices weigh on grains at ports, in detail, sorghum and barley for the time being are likely to keep stable. 

(USD $1=CNY 6.29)