Today (May 20th), the market for meals in China is shown as follows:
Soybean meal: U.S. soybeans ended sharply lower last Friday, but meal futures fluctuate to edge up on the Dalian Commodity Exchange today. Soybean meal steadily goes up 10-20 yuan/tonne in spot market. Specifically, the price settles at 2,720-2,780 yuan/tonne in coastal areas. (Tianjin 2,780, Shandong 2,750-2,770, Jiangsu 2,720-2,740, Dongguan 2,730-2,740, and Guangxi 2,720-2,740). The price will be buoyed to extend its strong trend as aquaculture has gradually got started and mills are stress-free in inventory amid strong trading for its minor spread against alternative meals, in addition to growing import cost of soybean by a weaker RMB. However, due to handsome crush margins, soybean crush has increased by 15% to 1.93 mln tonnes last week, and will remain at a relatively high level of 1.90 in the following two weeks. Moreover, data from China’s Ministry of Agriculture and Rural Affairs show that the number of breeding pigs slaughtered has declined 13% in April from a year earlier, so the African swine fever still remains as a curb on demand. And downstream buyers will also spend some time digesting their stockpiles. Therefore, soybean meal will have limited upward potential. As there is still hope for a detente in trade talks between China and the United states, and soybean meal now has hit 2,700 yuan/tonne, so buyers must remain cautious in case of short-term corrections.
Imported rapeseed meal: Imported rapeseed meal steadily edges higher today, of which it settles up 10-20 yuan at 2,300-2,380 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,370, up 20; and Fujian 2,380, up 20). Rapeseed posts a tight supply outlook with only two cargoes left in May and only one in June as its import is blocked by tensions between China and Canada. And demand from aquaculture is gradually increasing with the summer moving on in south China, so that rapeseed meal inventory has declined by 7% weekly to 280,000 tonnes last week. But its demand has been largely taken away by soybean meal due to minor spread, and mills will raise their soybean crush by 15% to 1.93 mln tonnes for good margins of South American crops amid huge global soybean supply. Overall, the price is predicted to continue its rises, and buyers had better not be lured by huge rises.
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 96,000 tonnes, Fuzhou 23,000 tonnes, Shanghai 84,000 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 at 1,640 USD/tonne. Domestic holders are encouraged to prop up prices by stable foreign quotations and intensifying price inversion at home and abroad under a weaker yuan, which is positive to domestic fishmeal market. But the market is still pressured by weak demand and high stockpiles. Overall, fishmeal market will probably keep steady to consolidate in the short term.
Cottonseed meal: Cottonseed meals today are stable with some weak fluctuations of 20-50 yuan/tonne when data from the Ministry of Agriculture shows April's pig slaughter declined 13% year on year; the spread of ASF greatly impacts demand for cottonseed meal. Moreover, 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 and the trading of new order for cottonseed meal is slow. However, some support comes from the following situations that the operation rates and output are low; cottonseed price is strong; today meals on DCE slightly rise with fluctuations, and spots soybean meal are stable with a rise of 10-20 yuan/tonne. Short-term cottonseed meal likely remain stable with fluctuations at narrow range and buyer can maintain wait-and-see attitudes.
(USD $1=CNY 6.91)
