Today (Jun. 19th), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures closed with gains in overnight trading on the hope for some improvements in trade relations between China and the United States as President Xi Jinping was invited to have a telephone talk with President Donald Trump on 18th, after which Trump said in a post on Twitter that “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting”. But meal futures broadly fall on the Dalian Commodity Exchange today as the news is negative to domestic market. Spot bids for soybean meal drop by 50-80 yuan/tonne in tepid trading Specifically, the price settles at 2,830-2,940 yuan/tonne in coastal areas. (Tianjin 2,920, Shandong 2,880-2,940, Jiangsu 2,890-2,930, Dongguan 2,830-2,940, and Guangxi 2,830-2,900). Meal prices have come under pressure from a myriad of factors, ranging from huge old soybean supply in the U.S., bumper soybean harvests in South America, and successive soybean auction in China, to domestic delicate soybean meal trading under the African swine fever. Soybean meal price is forecast to drop in the short run on hope for a detente in trade frictions. But due to lingering weather speculation on U.S. soybeans and huge uncertainties in trade disputes, the price may post frequent fluctuations and still has a chance to rise. Buyers can wait for low and stable prices to make proper replenishment on the dips.
Imported rapeseed meal: Imported rapeseed meal is traded lower today, of which it settles down 40-50 yuan at 2,500-2,560 yuan/tonne in coastal areas. (Guangxi 2,540; Guangdong 2,560, down 50; and Fujian 2,510, down 50). U.S. soybeans closed higher overnight on hope for some improvements in trade relations between China and the United States as President Xi Jinping was invited to have a telephone talk with President Donald Trump on 18th, after which Trump said in a post on Twitter that “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting”. But meal futures broadly fall on the Dalian Commodity Exchange today as the news is negative to domestic market. Rapeseed meal market has come under pressure on weak demand as feed mills have replaced rapeseed meal substantially with soybean meal due to their small price spread and the African swine fever is still spreading. But there will be limited downside space for the price since rapeseed meal inventory continues to drop as rapeseed import is now interrupted by lingering stalemate between China and Canada and the aquaculture has got started. Besides, China’s Ministry of Commerce said it will maintain anti-dumping and anti-subsidy tariffs on imports of U.S. distillers grains (DDGS). In the near term, the price will largely maintain its fluctuations, and buyers can wait for low and stable prices to make replenishment in small batch on the dips.
Imported fishmeal: Imported fishmeal prices decline with some room for negotiation amid tepid shipments at port today. Quotation at ports: it is priced lower by 200-300 yuan at 10,200-10,300 yuan/tonne for Peruvian Fair Average Quality SD with 65% protein content, also by 200-300 yuan at 10,500-10,600 yuan/tonne for Thai SD with 67% protein content, by 100-200 yuan at 10,900-11,100 yuan/tonne for Japanese SD with 67% protein content and by 100 yuan at 11,300-11,500 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 100,000 tonnes, Fuzhou 22,000 tonnes, Shanghai 78,000 tonnes, Tianjin 1,000 tonnes, Dalian 17,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot price (FOB) in foreign market drops today: it is 1,410 USD/tonne for Peruvian Fair Average Quality SD fishmeal with 65% protein content and lower by 30 USD at 1,580 USD/tonne for Prime SD fishmeal with 68% protein content. Chilean Fair Average Quality 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 fishery catch is now nearly 80% completed in north-central Peru, and local mills lower their prices today in weak sales sentiment. In the meantime, domestic demand for fishmeal remains delicate as the aquaculture is subject to heavy rainfalls, resulting in quiet port shipments. But there is still price inversion in domestic market, which has provided some support for holders. Overall, fishmeal market will keep steady in the short run.
Cottonseed meal: Cottonseed meals today are stable with some drops of 20-100 yuan/tonne, when the spread of ASF greatly impacts demand for cottonseed meal; 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 trading of new order for cottonseed meal is slow. Besides, a telephone conversation by leaders of China and the United States has confirmed a meeting between the two leaders during the upcoming Group of 20 (G20) summit and before that, trade talks will restart, which is a signal of possible improvement for U.S.-China trade relationship and negative to China's soybean meal market. Today meals on DCE fall back in a wide range and spot soybean meal declines 50-80 yuan/tonne. However, cottonseed meal decline is limited by low operation rate and output and strong cottonseed price. Short-term cottonseed meal is likely to move sideways weakly and buyers can stay on the sideline for the present and make proper replenishment upon low and stable prices.
(USD $1=CNY 6.90)
