Today (May. 6th), the market for meals in China is shown as follows:
Soybean meal: U.S. President Donald Trump twitted to vow new tariff hikes on Chinese goods due to slow progress in trade talks, and China was considering canceling this week’s trade talks in Washington D.C., Bloomberg said in its report. The market, which was expecting good news from trade talks, was enveloped with tense atmosphere. Therefore, U.S. soybean post sharp losses on Globex, and domestic stock market also slumps, but meal futures respond to rebound upon trade concerns. Spot soybean meal follows to increase by 10-40 yuan/tonne with some deals at low prices. Specifically, the price settles up 20-50 yuan/tonne against that before the holiday at 2,500-2,550 yuan/tonne in coastal areas. (Tianjin 2,560, Shandong 2,540-2,550, Jiangsu 2,500-2,510, Dongguan 2,500-2,530, and Guangxi 2,500-2,530). The price rise can be partially contributed to easing inventory pressure after strong trading volume in recent two months, but it is still restricted by huge volume of soybean import from May to July and a more difficult task in controlling ASF in summer. Short-term soybean meal price has rebounded upon renewed concerns on trade disputes, but it may turn flat at any moment upon such uncertainties. Moreover, crush margins remain handsome for South American crops. Therefore, buyers are suggested not to drive up prices too high, but to replenish appropriately on the dips.
Imported rapeseed meal: Imported rapeseed meal steadily rises today, of which it settles up 10-20 yuan at 2,130-2,210 yuan/tonne in coastal areas. (Guangxi 2,130, stable; Guangdong 2,150, stable; and Fujian 2,210, up 10). Donald Trump was complaining about slow trade talks and was set to raise additional tariffs of 10% on $200 bln Chinese goods to 25% on this Friday, accoding to a Bloomberg report. And the Wall Street Journal reported on Sunday night that China was considering canceling this week’s trade talks in Washington. U.S. soybean slumps on Globex due to renewed worries on trade disputes, but rapeseed meal futures see rises on the Zhengzhou Commodity Exchange today. Rapeseed meal inventory has declined by 14% to 36,000 tonnes in coastal areas last week, while rapeseed cargoes from Canada have all been canceled amid diplomatic tensions. The market has thus received some support from tight supply, and may rebound upon trade concerns in short term. But its demand has been severely cut by its narrowed spread with soybean meal, and soybean import will be ballooning from May to August; hence, rapeseed meal will see little upward potential capped by soybean meal. Buyers can replenish appropriately on the dips.
Imported fishmeal: Imported fishmeal prices stay stable amid tepid shipments at port today. Quotation at ports: it is priced steadily at 10,200-10,300 yuan/tonne for Peruvian ordinary SD with 65% protein content and 10,500 yuan/tonne for Thai SD with 67% protein content, 10,900-11,100 yuan/tonne for Japanese SD with 67% protein content and 11,200-11,500 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 90,000 tonnes, Fuzhou 24,000 tonnes, Shanghai 82,000 tonnes, Tianjin 1,000 tonnes, Dalian 18,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot price (FOB) in foreign market keeps steady today: it is 1,410 USD/tonne for Peruvian ordinary SD fishmeal with 65% protein content and 1,660 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 higher by 90 USD/tonne at 1,640 USD/tonne. The market is a hybrid of a bull and a bear. On one hand, domestic holders have received some support from firm quotation abroad and price inversion at home and abroad; on the other, inventory pressure is intensifying amid tepid demand and new cargoes from Peru. Overall, fishmeal market will probably keep steady to consolidate in the short term.
Cottonseed meal: Cottonseed meals today are stable with some rises of 50 yuan/tonne. Some support for cottonseed meal comes from the low operation rates and output. Moreover, President Trump said that he believed talks were progressing too slowly and warned he would consider increasing tariffs on Chinese goods, and foreign media said the Chinese side may back out of this week’s negotiations. Market suddenly changes its optimistic mood towards trade talks and becomes tense again. And thus meals on DCE rebound, and soybean meal spots are up 10-40 yuan/tonne accordingly. However, ASF drags down demand for cottonseed meal. And as the price spread between soybean meal and cottonseed meal is too narrow, the substitution of soybean meal from cottonseed meal happens in feed factory. The low prices of soybean meal are likely to affect the upward potential for cottonseed meal. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.79)
