Today (Mar. 4th), the market for meals in China is shown as follows:
Soybean meal: US soybean inched up last Friday, but meal futures fall after low opens on the Dalian Commodity Exchange (DCE) today. Soybean meal spots edge down in light trading. Specifically, the price goes down by 10-20 yuan/tonne to settle at 2,440-2,520 yuan/tonne. (Tianjin 2,480, Shandong 2,440-2,460, Jiangsu 2,460-2,510, Dongguan 2,490-2,510, and Guangxi 2,500-2,520). A foreign report said that China and the United States are much closer to a deal. China is offering to lower tariffs on U.S. agricultural products and the United States is considering eliminating most if not all of the trade sanctions imposed on Chinese products last year. Both sides will meet for a fresh round of talks in Beijing on March 14 and 15, and two presidents will meet sign a deal on around March 27th. This news has sent a boost to US soybean but brought bearish sentiment to domestic market. In addition, soybean meal inventory has kept rising in oil mills, which even results in machine shutdowns. And traders have taken the arbitrage of buying oils and selling meals. Therefore, meal futures on the DCE have come under pressure. According to Cofeed, pig number has dropped further by 8.5% in February and sow amount by 15% amid the rampant ASF. Due to negative demand in later market, soybean meal market will be weighed down to go weak, and buyers can just wait on the sidelines.
Imported rapeseed meal: Prices for imported rapeseed meal are mixed today, of which it fluctuates by 10-20 yuan/tonne to settle at 2,130-2,210 yuan/tonne in costal areas. (Guangxi 2,130, down 20; Guangdong not offered; Fujian 2,210). The market rumored that several Canadian enterprises are disqualified to export rapeseed to China. Meanwhile, the Canadian government has decided to allow the extradition process of Meng Wanzhou to proceed with a hearing on March 6. Some state-owned enterprises thus violates their cargo contracts with concerns over tensions between China and Canada. Therefore, rapeseed meal continues to edge up on the Zhengzhou Commodity Exchange today, in spite of its declines on the DCE. But later demand for rapeseed meal will be severely influenced by following factors including adequate rapeseed supply before May, price slumps of aquatic products at Southern ports and the contagious ASF, which has led to a 8.5% drop in live pig number and a 15% in sow amount in February. Besides, price spread between soybean meal and rapeseed meal has narrowed down to 330 yuan/tonne, far below the level of 800 yuan/tonne. Moreover, rapeseed meal is gradually excluded from duck feedstuff with growing imports of sunflower meal, and its ratio in aquaculture may fall to 10%. A foreign report said that China and the United States are much closer to a deal and their two presidents will meet sign a deal on around March 27th. On the whole, short-term rapeseed meal spots will have limited upward space and may maintain its weak outlook, and buyers are suggested not to force up the price too high.
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 69,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 54,000 tonnes, Tianjin 1,000 tonnes, Dalian 12,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot quotations (FOB) in foreign market keeps steady: the quotation is unchanged at 1,230 USD/tonne for Peruvian ordinary SD fishmeal with 65% protein content and at 1,530 USD/tonne for super SD fishmeal with 68% protein content. Chilean ordinary fishmeal with 65% protein content is quoted steadily at 1,410 USD/tonne, and prime with 68% protein content at 1,550 USD/tonne. Fishmeal is traded better at Southern ports as weather gets warmer, so that holders are supported to keep their quotation steady. Therefore, short-term fishmeal market will broadly keep steady.
Cottonseed meal: Cottonseed meal prices today are stable with a decline of 20-100 yuan/tonne. Market is pessimistic about the demand when ASF continues to spread in China. According to Cofeed's investigation, the number of live hogs and sows separately declined 8.5% and 15% month on month. Besides, soybean meal spots today fall 10-30 yuan/tonne owing to the rise of soybean meal stock, the machine halt in meal-bloated mills, and the arbitrage of buying oils and selling meals. Add the news that U.S.-China leaders may sign a trade deal on March 27 when it's nearing completion, and cottonseed meal weakens with fluctuations, the weakness for the short run is hard to change. Buyers are suggested to stay on the sideline for the present.
(USD $1=CNY 6.69)
