Today (Jul. 2nd), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean slumped overnight as its harvest prospect was buoyed by improving weather conditions, and meal futures extend losses after opening lower on the Dalian Commodity Exchange today. Spot bids for soybean meal follow to drop by 20-40 yuan/tonne in tepid trading. Specifically, the price settles at 2,770-2,860 yuan/tonne in coastal areas. (Tianjin 2,860, Shandong 2,820-2,840, Jiangsu 2,800-2,840, Dongguan 2,770-2,810, and Guangxi 2,780-2,840). 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. Meanwhile, the ongoing African swine fever has caused a huge decline in breeding pig amount in Guangdong and Guangxi, and the price of broiler has been falling in recent few days, so these two factors have influenced the demand for meals. Soybean meal has been in delicate trading in recent few weeks, and some mills have not received any order for one to two weeks so that they have begun to seek export channels under heavy sales pressure. Soybean meal has increased by 4.9% weekly to 895,000 tonnes, and several mills in Shandong and South China have been bothered by swelling inventories. Besides, China and the United States have agreed to restart their trade talks. Therefore, meal prices react negative. But it is still hard to predict the outcome of trade talks, and the crop weather is still variable in the U.S., which will help restrict the downside space of meal prices. Buyers can wait for low and stable prices to make proper replenishment.
Imported rapeseed meal: Imported rapeseed meal drops today, of which it settles down 10-20 yuan at 2,480-2,550 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,550, down 10; and Fujian 2,480, down 20). Feed factories have replaced rapeseed meal substantially with soybean meal due to their small price gap, and mills will continue to keep high utilization rate for soybean crush in view of its huge import volume arriving at port in the third quarter. And the African swine fever is still spreading. Hence, rapeseed meal market has come under pressure. But it is unlikely for China and Canada to resolve their conflicts within a short time, so rapeseed supply may get tightened in the second half of July. Meanwhile, aquaculture has been underway in South China, so that rapeseed meal has been declining in inventory in coastal areas. As mills are propping up prices, there will be little room for downside. Futures are now in the correction territory due to the restart of trade talks between China and the United States, so buyers can wait on the sidelines for the moment.
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 102,000 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 today: it is 1,410 USD/tonne for Peruvian Fair Average Quality SD fishmeal with 65% protein content and 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. A slow recovery in aquaculture and the ongoing African swine fever have jointly limited the demand for fishmeal, sending its shipment to be lower than import volume, so that domestic fishmeal market is subdued by high stockpiles. But there is still support from firm prices abroad and price inversions at home and abroad. Overall, fishmeal market is predicted to keep 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 sluggish; today meals on DCE go lower with low open and spot soybean meal accordingly declines 20-40 yuan/tonne. However, the decline is restricted as the operation rates and output are low; cottonseed price is strong. Short-term cottonseed meal is likely to experience a weak adjustment amid the US-China trade talks resuming and buyers can maintain wait-and-see attitudes for now.
(USD $1=CNY 6.86)
