Today (Jan. 8th), the market for meals in China is shown as follows:
Soybean meal: US soybean extended its gains last night amid trade talks between the U.S. and China and another round of soybean purchase by China. But today meals trade marginally lower on the Dalian Commodity Exchange, and soybean meal spots stay stable with slight declines amid light trading. The price goes down steadily by 10-20 yuan to 2860-2960 yuan/tonne in coastal areas. (Tianjin 2,880, Shandong 2,860-2,880, Jiangsu 2,850-2,950, Dongguan 2,860-2,960, and Guangxi 2,860-2,900). The market has sent consecutive price rebounds to soybean meal by stockpiling before the Spring Festival, but domestic meal market has been choked by a new round of US soybean purchase for at least three cargoes on Monday, which is to finalize the negotiation requirements of 5.0 Mln tonnes by the U.S.. While at this moment, the African swine fever (ASF) is wreaking havoc undermining the margins from breeding to sink the lowest point since November 30, 2018, under which hog farmers are unwilling to make replenishment. In addition, aquaculture has been in slack season. Therefore, the demand for soybean meal is quite sluggish, bringing its stock to increase by 9% weekly to a very high level of 1.23 Mln tonnes. Therefore, soybean meal snaps its price rises to decline slightly upon the above bearish fundamentals. The U.S.-China trade talk has entered into the second day, for which Chinese Vice Premier has made an appearance on the first day and U.S. Commerce Secretary has predicted that Beijing and Washington could strike a trade deal, and its outcome may be released today. Domestic meal market will turn bearish once any trade deal is reached, and buyers can wait on the sidelines for the time being.
Imported rapeseed meal: The price for imported rapeseed meal stays stable to edge up today, of which it is 2,130-2,220 yuan/tonne in coastal areas, a steady rise of 10 yuan/tonne. (Guangxi 2,130, up 10; Guangdong 2,190; and Fujian 2,200). Rapeseed crush has dropped further because two major mills have both halted after an impeded cargo unloading amid strained relations between China and Canada, in addition to the start of stockpiling before the festival, so that oil mills begin to prop up the price. But the market are optimistic about the outcome of the trade talk, which has entered into its second day, and domestic will get negative if Beijing and Washington manage to strike a deal. Buyers can briefly await the outcome and its guidance.
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 72,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 54,000 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, as well as the stockpiling before the Spring Festival. In the near term, fishmeal market will probably go downward.
Cottonseed meal: Some cottonseed meal prices today go up 30 yuan/tonne due to the demand for stockpiling before holiday amid strong cottonseed prices and low cottonseed meal output. However, soybean meals today stably fall 10-20 yuan/tonne. ASF continues to spread in China amid limited demand. Moreover, if some agreements in the ongoing US-China trade talks in Beijing are reached today, the China's meals market will turn negative. So with the buyer's previous replenishment upon low prices and slower purchase pace, the upward potential for cottonseed meal is curbed. Buyers therefore had better not chase bids high.
(USD $1=CNY 6.86)
