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Daily Review on Meal Market in China

2019-05-08 www.cofeed.com
      Today (May. 8th), the market for meals in China is shown as follows:

      Soybean meal: U.S. soybeans technically rebounded in overnight trading, and meal futures continue to edge higher on the Dalian Commodity Exchange today. Spot soybean meal follows to increase by 10-20 yuan/tonne in lighter trade. Specifically, the price settles at 2,530-2,580 yuan/tonne in coastal areas. (Tianjin 2,580, Shandong 2,560-2,570, Jiangsu 2,550-2,560, Dongguan 2,540-2,550, and Guangxi 2,530-2,550).Oil mills have almost sold out their soybean meal stockpiles amid higher-than-expected demand and robust trading volume as it has largely taken over alternative meals, so meal prices is supported by its stress-free supply. However, Chinese oil mills bought another three cargoes of Brazilian soybeans for good crush margins, of which two cargoes were traded at +138N and +146N (CNF) for June shipment and the other was +150N (CNF) for July shipment. Such an adequate supply prospect, coupled by higher difficulty in controlling the African swine fever in summer, will affect the price rises of soybean meal. Soybean meal is buoyed to rebound by renewed concerns over trade disputes, but there is a hope for a deal as Chinese delegates will travel Washington for talks on Thursday and Friday. Buyers with adequate stockpiles are suggested not to chase up prices and to wait for the guidance from trade talks. 

      Imported rapeseed meal: Imported rapeseed meal posts rises today, of which it settles up 10-20 yuan partially at 2,150-2,240 yuan/tonne in coastal areas. (Guangxi 2,150, up 10; Guangdong 2,190, up 20; and Fujian 2,240, up 10). Rapeseed meal market is buoyed by a tight rapeseed supply outlook since there is no rapeseed cargoes after May, in addition to renewed concerns over trade talks between China and the United States and ongoing tensions between China and Canada. But due to its largely narrowed spread with soybean meal, rapeseed meal has seen delicate demand when feed companies tend to use soybean meal. Besides, Chinese importers have bought 6 cargoes of Brazilian soybeans in the last two days for good crush margins, and soybean inventory has already gone higher by 7% from a year earlier in coastal areas. Restricted by soybean meal prices, rapeseed meal will find little upward space, so buyers are suggested not to chase after excessive hikes.

      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 92,000 tonnes, Fuzhou 23,000 tonnes, Shanghai 83,000 tonnes, Tianjin 1,000 tonnes, Dalian 19,000 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, inventory pressure is intensifying amid tepid demand and new cargoes from Peru; on the other, domestic holders have received some support from firm quotation abroad and price inversion at home and abroad. Overall, fishmeal market will probably keep steady to consolidate in the short term.

      Cottonseed meal: Today cottonseed meal mostly stays stable with a rise of 50 yuan/tonne for some prices as the operation rates and output are low; U.S. soybeans overnight saw a technical rebound and today meals on DCE further go up a little, with soybean meal spots up 10-20 yuan/tonne. 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 6.77)