Today (May. 14th), the market for meals in China is shown as follows:
Soybean meal: Beijing announced yesterday it would impose higher tariffs on the second tranche of U.S. goods valued at $60 billion from June 1 in retaliation for Washington’s decision to increase tariffs on $200 billion worth of Chinese imports, but soybean is on the list of the first tranche so that its additional tariff remains at 25%. On Monday, the Office of USTR said it planned to hold a public hearing on June 17th on the possibility of imposing duties on a further $300 billion worth of imports from China. As a result, U.S. soybean pointed to another loss last night, but meal futures fluctuate to edge higher on the Dalian Commodity Exchange today. Spot soybean meal steadily fluctuates by 10-20 yuan/tonne in weaker trading. Specifically, the price settles at 2,630-2,690 yuan/tonne in coastal areas. (Tianjin 2,690, Shandong 2,650-2,680, Jiangsu 2,640-2,670, Dongguan 2,630-2,660, and Guangxi 2,620-2,670). Demand is increasing as aquaculture gets started, mills are pressure-free in stockpiles as soybean meal is reporting strong trading due to its minor spread with mixed meals, and import cost has been lifted as the RMB depreciates significantly. These have thus made joint support to soybean meal prices. Nevertheless, downstream buyers will spend some time digesting stockpiles after this round of vigorous replenishment, and mills will pick up utilization rate at full blast lured by profitable South American crops. Besides, President Donald Trump said that he would meet President Xi Jinping at the G20 held in Japan in late June, for which he said “I have a feeling it’s going to be very successful”. Buyers are suggested not to be lured by excessive hikes on account of uncertainties in trade frictions.
Imported rapeseed meal: Imported rapeseed meal steadily edges up today, of which it settles up partially by 10 yuan at 2,210-2,290 yuan/tonne in coastal areas. (Guangxi 2,210, stable; Guangdong 2,270, stable; and Fujian 2,290, stable). Rapeseed meal inventory continues to drop, whilst there is no cargo from Canada after May; hence, rapeseed meal market is shored up. But its demand has been largely taken away by soybean meal due to minor spread, and mills will raise their utilization rate for soybean crush due to profitable South American crops. Besides, both two leaders of China and the United States may manage to resolve trade disputes at a G20 summit in Japan in late June. There will be limited room for rapeseed meal to continue its rises, and buyers has better not chase after excessive price hikes.
Imported fishmeal: Imported fishmeal prices stay stable amid tepid shipments at port today. Quotation at ports: it is priced steadily at 10,400 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,700 yuan/tonne for Thai SD with 67% protein content, 11,000-11,100 yuan/tonne for Japanese SD with 67% protein content and 11,300-11,500 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 95,000 tonnes, Fuzhou 24,000 tonnes, Shanghai 84,000 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 at 1,640 USD/tonne. The market is a hybrid of a bull and a bear. On one hand, domestic quotations keep firm due to stable bidding at foreign market and price inversions at home and abroad; on the other, the market is restricted by low demand and growing inventories at ports. Overall, fishmeal market will probably keep steady to consolidate in the short term.
Cottonseed meal: Cottonseed meals today are stable with some rises of 50-70 yuan/tonne, when the operation rates and output are low and a strong cottonseed price provides support for the cost of cottonseed meal. Additionally, China said late on Monday that it will increase tariffs on the bulk of $60 billion of US imports. And on Monday US President Donald Trump had also ordered the start of a process to impose new duties on another $300 billion worth of Chinese items with public hearing on June 17. The heated trade war further props up cottonseed meal market and today meals on DCE rise slightly with fluctuations. However, 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 slow trade of new orders are likely to affect the upward potential for cottonseed meal. Buyer shouldn't chase high bids too far amid the great uncertainties over trade talks.
(USD $1=CNY 6.87)
