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Daily Review on Meal Market in China

2018-12-11 www.cofeed.com
      Today (Dec. 11th), the market for meals in China is shown as follows:
 
      Soybean meal: US soybean closed with losses last night due to position adjustments ahead of the report release, and today meals rebound on the Dalian Commodity Exchange (DCE) with its gains narrowing gradually. Soybean meal stays stable to fluctuate in coastal areas today with a small trading volume. The price is 2,980-3,050 yuan/tonne, fluctuating by 10-30 yuan/tonne (Tianjin 3,000, Shandong 2,980-3,050, Jiangsu 2,960-3,050, Dongguan 2,970-3,030, Guangxi 3,020-3,050). Soybean meal market has been trapped in light volume since aquaculture has completed and African swine fever (ASF) still wreaks havoc, for which its stock has been at a high level of 940,000 tonnes in coastal areas and some oil mills have restricted their production or even powered off their machines. Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary and Trade Representative today to discuss the road map for the next stage of their trade talks. And last week, Ministry of Finance officials led the meeting to discuss restarting US soybean imports. After this, a Bloomberg report said that China intends to announce this month the first batch of U.S. soybean purchases. On account of the trade truce and bearish fundamentals, short-term soybean meal price may still take on weak fluctuations. Participants can focus on the USDA’s report tonight and buyers can take hand-to-mouth buying and replenish in small batches on the dips if out of stock. 
 
      Imported rapeseed meal: The price for imported rapeseed meal stays table to decline today, of which it is 2,190-2,260 yuan/tonne in coastal areas, down by 10-20 yuan/tonne. (Guangxi 2,200, down 30; Guangdong 2,230, stable; Fujian 2,260, down 20). Rapeseed meal market has been undermined by its bearish fundamentals. For one thing, soybean meal now holds a huge inventory as it has been trading light amid slack demand from aquaculture and under the rampant ASF, and Brazilian soybean is expected to have a bumper harvest. For another, Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary and Trade Representative today to propel trade negotiations, and last week, Ministry of Finance officials led the meeting to discuss restarting US soybean imports. After this, a Bloomberg report said that China intends to announce this month the first batch of U.S. soybean purchases. However, Canada has reduced its rapeseed output forecast, whilst rapeseed meal price will be raised by the cost. Generally, short-term rapeseed meal will present narrow fluctuations on the back of its futures, and buyers are suggested to replenish appropriately on the dips and be careful in forcing up the price. 
 
      Imported fishmeal: Today, imported fishmeal is quoted steadily and can be traded with price negotiations, with normal shipment at port. Northern ports: price is 9,900-10,000 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,700-10,900 yuan/tonne for Japanese SD with 67% protein content and 11,000-11,100 yuan/tonne for super steam fishmeal with 68% protein content. Southern ports: price is 9,800 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,600 yuan/tonne for Japanese SD with 67% protein content and 10,900 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 75,000 tonnes, Fuzhou 36,000 tonnes, Shanghai 56,000 tonnes, Tianjin 1,000 tonnes, Dalian 19,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot quotations (FOB) in foreign market keep steady: Peruvian ordinary SD fishmeal with 65% protein content is quoted at 1,250 USD/tonne and 1,530 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. Holders are under pressure in that new fishing has been reported of good states. In addition, port stock pressure keeps growing under soft demand in domestic market. Fishmeal now falls negative and will probably stay stable to go weak in the near term.   
 
      Cottonseed meal: Cottonseed meal steps down by another 50 yuan/tonne partially today, for it has been trading light when buyers remain cautious in face of dismal demand under the contagious ASF, in addition to soybean meal spots fluctuating steadily by 10-30 yuan/tonne. Besides, Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary today to propel trade negotiations. But its decline is restricted by its small output and high cost. Overall, short-term cottonseed meal may go weak in fluctuation. By the way, China is said to buy some 5.0 Mln tonnes of US soybean, and buyers can just wait on account of the existing bearish factors. 
 
(USD $1=CNY 6.90)