Today (Jul. 1st), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures rallied last Friday as soybean planting acreage came in well below forecasts, but meal futures expand losses after lower opens on the Dalian Commodity Exchange today on a detente in tariff disputes, as the United States and China agreed to restart trade talks after President Donald Trump committed to hold back on new tariffs and allowed U.S. firms to supply components to Huawei. Spot bids for soybean meal follow to drop by 10-20 yuan/tonne in tepid trading. Specifically, the price settles at 2,810-2,880 yuan/tonne in coastal areas. (Tianjin 2,880, Shandong 2,840-2,860, Jiangsu 2,820-2,870, Dongguan 2,800-2,810, and Guangxi 2,800-2,850). A large quantity of soybeans are predicted to arrive at port in the third quarter, so that mills have kept a relatively high utilization rate in the past few weeks. But meanwhile, the African swine fever, which has caused a sharp decline in breeding pig amount in Guangdong and Guangxi, is still a factor that influences the demand for soybean meal. Under huge sales pressure, mills have begun to seek for foreign markets. Soybean meal has traded so delicate in recent few weeks that its inventory keeps growing, with an increase of 4.9% weekly to 895,000 tonnes, and several mills in Shandong and Guangxi have been bothered by swelling inventories. These are all negative factors to meal prices. China and the United States have agreed to resume trade talks, but it will take time for both sides to strike a deal. And the market will currently be supported by the huge decline in planting acreage. Therefore, there is little room for soybean meal prices to downside in the short term. Buyers can wait for low and stable prices to make appropriate replenishment on the dips.
Imported rapeseed meal: Imported rapeseed meal drops today, of which it settles down 50-60 yuan at 2,530-2,560 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,560, down 60; and Fujian 2,520). Currently, rapeseed meal is in subdued demand as its price gap with soybean meal has hit a five-year low of 350-400 yuan/tonne, far below a normal level of 800 yuan/tonne. And it is less likely to remove the influence caused by the African swine fever in the short run. Besides, the utilization rate for soybean crush will be kept at a high level due to huge quantities of soybeans import arriving at port in the next three to four months. Rapeseed meal market has thereby come under pressure. However, there is still huge uncertainty in trade talks between China and the United States and it is almost unlikely for China and Canada to settle their conflicts within a short time, so rapeseed supply may get tightened in the second half of July. Moreover, aquaculture has been underway, and rapeseed meal inventory has fallen by 40% to 11,000 tonnes last week due to a decline in crush. Hence, rapeseed meal price will have little downward potential and will maintain its overall strong trend. Buyers can wait for low and stable prices to replenish properly on the dips.
Imported fishmeal: Imported fishmeal prices are flat today amid tepid shipments at port today. Quotation at ports: it is priced steadily at 10,100-10,200 yuan/tonne for Peruvian Fair Average Quality SD with 65% protein content, 10,400-10,600 yuan/tonne for Thai SD with 67% protein content, 10,800-11,100 yuan/tonne for Japanese SD with 67% protein content and 11,200-11,400 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 103,000 tonnes, Fuzhou 22,000 tonnes, Shanghai 78,000 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 stays stable with a rise today: it is 1,410 USD/tonne for Peruvian Fair Average Quality SD fishmeal with 65% protein content and up by 70 USD at 1,630 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. Aquaculture is coming back at a slow pace in South China subject to the strong rainfalls, couples with the African swine fever, so the demand for fishmeal is delicate. As a result, import volume is larger than shipment, sending the inventory to keep growing. This is bearish to domestic fishmeal market. But there is still some support from higher quotations at abroad and price inversions at home and abroad. Overall, fishmeal market is predicted to hold steady in the short run.
Cottonseed meal: Cottonseed meals today are stable with some drops of 50 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; demand in downstream is not good. Besides, today meals on DCE fall back with low open, and spot soybean meal accordingly decline 10-20 yuan/tonne, which is negative to cottonseed meal, as American and Chinese leaders has agreed to resume trade talks after the meeting during G20 summit and Trump said additional U.S. tariffs wouldn't be placed on Chinese goods and allow Huawei to buy US products. However, the price decline is restricted as the operation rates and output are low; cottonseed price is strong; demand from aquatic farming in some region is good and trading of new orders turns better. Short-term cottonseed meal is likely to fluctuate narrowly, and buyers can take a hand-to-mouth buying strategy for the moment.
(USD $1=CNY 6.84)
