Today (Jan. 7th), the market for meals in China is shown as follows:
Soybean meal: US soybean extended its gains last Friday ahead of US-China trade talks and upon concerns over dry weather in Brazil. Today, meals trim their gains after higher opens on the Dalian Commodity Exchange, and soybean meal spots post steady rises to trade a little. Specifically, the price goes higher by 10-20 yuan/tonne from last Friday to settle at 2,870-2,980 yuan/tonne in coastal areas. (Tianjin 2,900, Shandong 2,860-2,890, Jiangsu 2,870-2,960, Donguan 2,870-2,980, and Guangxi 2,890-2,900). The U.S. officials have met with their counterparts in Beijing this morning amid US President Donald Trump’s statement that the two countries would make a deal, for which US stock may reverse its recent slump to post a big rally. But the market with positive expectations also holds that the US will have a list of requirements to be met before reaching a deal. Meal market will fall bearish if the trade talk goes on well. What’s more, almost all goods in bilateral trade have begun to enjoy zero tariffs between China and Australia from January 1st this year, according to the China-Australia Free Trade Agreement. In this case, rapeseed and its meal will stand a good chance of growth from Australia. But amid the rampant African swine fever (ASF) and the off-season aquaculture, soybean meal has been in sluggish shipment so that some oil mills have even halted for swelling soybean meal inventories. Soybean meal, consequently, will have limited upward potential. And buyers can just wait on the sidelines in case of any risk from the trade talks.
Imported rapeseed meal: The price for imported rapeseed meal steps up today, of which it is 2,120-2,220 yuan/tonne in coastal areas, a rise of 30-60 yuan/tonne. (Guangxi 2,120, up 30; Guangdong 2,190, up 60; and Fujian 2,200, up 30). Two major mills, as mentioned before having some problems in unloading their cargoes under tight relationship between China and Canada, have already powered off their equipment. As a result, rapeseed meal stock has fallen by 17% to 21,000 tonnes in coastal areas last week amid reduced crush volume. Rapeseed meal price is thus boosted to go up as oil mills show stronger willingness to lift the price. But global soybean supply has been under heavy pressure. Besides, China officials are meeting their US counterparts in Beijing today and tomorrow amid positive expectation from the market, and once the trade deal is reached, domestic market will fall bearish. What’s more, almost all goods in bilateral trade have begun to enjoy zero tariffs between China and Australia from January 1st this year, according to the China-Australia Free Trade Agreement. In this case, rapeseed and its meal will stand a good chance of growth from Australia. But the price rise of rapeseed meal is limited as meal demand is still subject to the slack aquaculture and the contagious ASF. Buyers are suggested not to force up the price excessively amid uncertainties in the trade talk.
Imported fishmeal: Today, imported fishmeal keeps steady in price and can be traded with price negotiations, with normal shipment at port. Quotation at ports: it is 9,600-9,700 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,400-10,600 yuan/tonne for Japanese SD with 67% protein content and 10,700-10,800 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 73,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 55,000 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 to rise: 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. Port stock has been bearing heavy pressure from light demand and slow shipment. In addition, holders face the demand for arbitrage toward the end of the year. Therefore, domestic fishmeal market is dragged down. But the market is relatively stable due to a firm foreign market and the price inversion both at home and abroad. In the near term, fishmeal market will stay stable with some declines.
Cottonseed meal: The prices of cottonseed meal today partially go up 30-80 yuan/tonne under support of a steady rise of soybean meal spots by 10-20 yuan/tonne and the improved delivery of cottonseed meal amid strong cottonseed prices and low cottonseed meal output. But if some agreements in the ongoing US-China trade talks in Beijing are reached, the China's meals market will turn negative and the upward potential for cottonseed meal will be curbed. What's more, end demand is still reeling from the spread of ASF; import tariffs on mixed meals have been removed in China; and the 3% China's tariff on Australia cottonseed will be removed for China and Australia have reached the agreement of zero duty in bilateral trade on almost all products. Buyers therefore had better not chase bids high.
(USD $1=CNY 6.85)
