Today is 03/29/2024

Daily Review on Meal Market in China

2018-10-30 www.cofeed.com
      Today ( Oct. 30th), the market for meals in China is shown as follows:
 
      Soybean meal: US soybean tumbled overnight to the lowest unseen in a month. Today meals on the Dalian Commodity Exchange (DCE) fall back broadly, and domestic soybean meal spots step down and trade flat. The prices in coastal areas range from 3,440-3,540 yuan/tonne, down 30-50 yuan/tonne against yesterday. (Tianjin 3,460, Shandong 3,440-3,520, Jiangsu 3,460-3,520, Dongguan 3,520-3,540, Guangxi 3,520-3,540). On one hand, Chinese government has released new standards to lower down soybean meal consumption, and 29 feed companies have committed to carry out this non-mandatory regulation. Besides, soybean meal demand has already influenced by its large price spread with mixed meals. On the other, Brazilian farmers are racing to plant soybean, with 3 million tonnes of soybean to be exported in January, and if weather permits, it will be in late December. In addition, 6 million tonnes of soybean will be dumped to target markets. In this context, supply gaps of forward soybean may be smaller than anticipated, which to some extent cracks down on oil mills’ confidence in supporting prices, so soybean meal price quickly falls back today. But ultimately the market will be guided by the trade war, for which presidents of the United States and China will meet in late November, and if it is not settled, the Trump administration will declare to impose additional tariffs on the rest commodities worth 257 Bln USD in early December. And if so, soybean meal price will soar again and may be to a new high unseen before, but if settled, the price will tumble to 3,000 yuan/tonne, or even lower. But it will fluctuate to adjust before the meeting. As there exist large uncertainties, participants are suggested not to force price up excessively, and buyers with inadequate inventories can replenish on the dips after steady falls.      
 
      Imported rapeseed meal: Imported rapeseed meal steps down substantially today. The price in coastal areas is 2,580-2,670 yuan/tonne, down 10-50 yuan/tonne (Guangxi 2,620, down 10; Guangdong 2,630, down 30; Zhangzhou Chintex, Fujian 2,650, down 50). Factors like a 500,000 tonnes rapeseed meal export from India and the meeting between China and the US have also conspired to knock down rapeseed meal market. But rapeseed meal supply is tight now, as it demand has increased due to its large price spread with soybean meal. Given this, oil mills are supporting the price, so the loss of spots is obviously smaller than that of futures. As futures have sped up to sink, buyers can just wait on the sidelines.
  
       Imported fishmeal: Today, imported fishmeal is quoted steadily and can be traded with price negotiations, with normal shipment at port. Northern ports: price is 10,600-10,700 yuan/tonne for Peruvian ordinary SD with 65% protein content, 11,500-11,700 yuan/tonne for Japanese SD with 67% protein content, and 11,600-11,800 yuan/tonne for super steam fishmeal with 68% protein content. Southern ports: price is 10,700 yuan/tonne for Peruvian ordinary SD with 65% protein content, 11,600 yuan/tonne for Japanese SD with 67% protein content, and 11,800 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 58,000 tonnes, Fuzhou 38,000 tonnes, Shanghai 58,000 tonnes, Tianjin 1,000 tonnes, Dalian 10,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot quotations (FOB) in foreign market keep stable: Peruvian ordinary SD fishmeal with 65% protein content is quoted at 1,330 USD/tonne, and 1,600 USD/tonne for super SD fishmeal with 68% protein content. Chilean ordinary fishmeal with 65% protein content is quoted at 1,510 USD/tonne, and prime with 68% protein content is 1,620 USD/tonne. Fishmeal market is thrown into a bearish stance by the slack demand, but holders are still waiting for information from Peru, in addition that import cost is brought higher by RMB devaluation; therefore, the overall market will probably stay stable before new fishing quotas are released by Peruvian government.    
 
      Cottonseed meal: Today meals on DCE fall broadly. Soybean meal spot price steps down by 30-50 yuan/tonne, coupled by contagious African swine fever, so cottonseed meal drops by 20-30 yuan/tonne partially amid its low trading volume. And it may fall back to adjust with the increased amount of new cottonseed meal on the market. But as its demand has increased slightly amid tight supply due to the price spread with soybean meal, so it will be more resilient than soybean meal. And if trade conflicts escalate, meal market grasp the opportunity to edge up again.   
 
(USD $1=CNY 6.97)