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Daily Review on Meal Market in China

2019-05-22 www.cofeed.com
      Today (May 22nd), the market for meals in China is shown as follows:

      Soybean meal: U.S. soybeans closed with losses in overnight trade, but meal futures still post moderate rises on the Dalian Commodity Exchange today. Soybean meal steadily goes up 10-20 yuan/tonne with fewer deals in spot market. Specifically, the price settles at 2,770-2,830 yuan/tonne in coastal areas. (Tianjin 2,870, Shandong 2,830-2,860, Jiangsu 2,770-2,810, Dongguan 2,800-2,810, and Guangxi 2,780-2,810). Soybean import cost has been raised by a weaker yuan under trade concerns and rising premiums of South American crops. Aquaculture has gradually got started, and soybean meal has been reporting strong trading due to its small price difference with alternative meals, which has helped mills get rid of inventory pressure. With limited sales volume in May, soybean meal will extend its strong trend before the relief of trade concerns. But mills have been active in crushing for handsome margins, sending soybean crush to a very high level in the past few weeks. And another case of the African swine fever was reported in Ningxia, whilst pig number in breeding has seen a sharp decline in other epidemic areas, which will be a curb to later market. In addition, trade talks may be resumed at any time between Beijing and Washington. These are all underlying risks in soybean meal market. Soybean meal futures have narrowed down gains after sustain rallies today, and buyers are suggested not to chase after excessive rises to avoid the risk of short-term corrections. 

      Imported rapeseed meal: Imported rapeseed meal steadily goes up today, of which it settles up 10 yuan partially at 2,360-2,440 yuan/tonne in coastal areas. (Guangxi 2,440; Guangdong 2,440, up 10; and Fujian 2,440, up 10). Rapeseed takes on a tight supply outlook in July and August as its import is facing a drag amid tensions between China and Canada, and rapeseed meal inventory has dropped with rising demand from the aquaculture. Moreover, trade concerns has been intensified by US bans on Huawei. Therefore, rapeseed meal market has received some support. But rapeseed meal has been fiercely replaced due to its narrowed spread with soybean meal, and soybean crush has remained stubbornly high due to good margins when domestic buyers are scooping up on South American crops; hence, there is limited space to rebound. Meal futures has narrowed down gains today, and buyers are suggested not to chase after excessive rises to avoid the risk of short-term corrections. 

      Imported fishmeal: Imported fishmeal prices keep steady amid tepid shipments at port today. Quotation at ports: it is priced steadily 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 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 growing import cost, 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 rises of 50 yuan/tonne as the operation rates and output are low; cottonseed price is strong; today meals on DCE keep a mild rise, and soybean meal spots are steady with a rise of 10-20 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. Short-term prices are likely to stay stable with some strong fluctuations and buyers had better not chase bids high too far.

      (USD $1=CNY 6.92)