Today (May 21st), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean closed with huge gains in overnight trading, and meal futures expand rises upon higher opens on the Dalian Commodity Exchange today. Soybean meal rises 40-70 yuan/tonne with tepid trading at low prices and light trading at high prices. Specifically, the price settles at 2,820-2,870 yuan/tonne in coastal areas. (Tianjin 2,870, Shandong 2,830-2,860, Jiangsu 2,800-2,820, Dongguan 2,800-2,810, and Guangxi 2,780-2,810). Trade concerns have been intensified by the U.S. bans on Huawei. The import cost is brought higher by rising premiums of South American soybeans and a weaker yuan. The aquaculture has gradually got started, and mills are stress-free in inventory amid strong trading for its minor spread against alternative meals. All these have made joint effort to support soybean meal to extend its strong trend. 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. The African swine fever is still spreading with another case found in Sichuan yesterday, and Guangdong feed enterprises have predicted a 40% decline in live hog number in western areas of Guangdong and in Guangxi, which will be curb on later demand. Besides, trade talks may be resumed at any time. Therefore, buyers are suggested to remain cautious in huge rises on account of those underlying risks.
Imported rapeseed meal: Imported rapeseed meal posts sharp rises today, of which it settles up 50-60 yuan at 2,350-2,420 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,430, up 60; and Fujian 2,430, up 50). 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. This will be a support to rapeseed meal market. But the spread between rapeseed meal and soybean meal has narrowed down to a five-year low of 350-400 yuan/tonne, far below a normal 800 yuan/tonne, which has severely affected the demand. Besides, it will be difficult to eliminate influence caused by the African swine fever, which was found again in Sichuan yesterday. So rapeseed meal price will find limited impetus for bounces. Overall, short-term trend may be buoyed to consolidate by trade concerns for US bans on Huawei, but the price will probably edge down if trade talks yield good fruit. Buyers had better not be lured by huge rises.
Imported fishmeal: Imported fishmeal prices climb higher amid tepid shipments at port today. Quotation at ports: it is priced higher by 100 yuan at 10,400-10,500 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,700-10,800 yuan/tonne for Thai SD with 67% protein content, 11,100-11,200 yuan/tonne for Japanese SD with 67% protein content and 11,400-11,600 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 96,000 tonnes, Fuzhou 23,000 tonnes, Shanghai 83,000 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 price inversion at home and abroad, 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: Today cottonseed meal mostly stays stable with a rise of 150 yuan/tonne for some prices as the operation rates and output are low; cottonseed price is strong; today meals on DCE surge, soybean meal spots accordingly up 40-70 yuan/tonne. However, cottonseed meal market is curbed because ASF drags down 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. As the restrictions on Huawei increase concerns over trade war, short-term cottonseed meal is likely to stay stable with strong fluctuations. But buyer shouldn't chase high bids too far when the trade talks are very uncertain and the tensions may ease at any time.
(USD $1=CNY 6.90)
