Today (Jul. 3rd), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures closed further lower overnight on a rising temperature outlook in the Midwest favorable to quicken soybean planting and emerging, and meal futures also extend losses on the Dalian Commodity Exchange today. Spot bids for soybean meal follow to drop by 10-20 yuan/tonne in tepid trading. Specifically, the price settles at 2,760-2,830 yuan/tonne in coastal areas. (Tianjin 2,830, Shandong 2,780-2,820, Jiangsu 2,770-2,820, Dongguan 2,760-2,800, and Guangxi 2,760-2,80S0). The quantity of soybeans arriving at port will be huge in the third quarter with a monthly average of 9.50 mln tonnes. In the meantime, the ongoing African swine fever has caused a sharp decline in breeding pig amount in Guangdong and Guangxi and become more severe in Hunan and Hubei, and a slump in broiler prices has also lowered down profits; hence, the demand for meals is under the influence. Due to its weak trading in recent few weeks, soybean meal has seen its inventory increasing by 5% weekly to 895,000 tonnes, resulting in swelling inventories in mills. All of these have made an impact on soybean meal prices. But it is still too early to expect any outcome in trade talks between China and the United States, and there is still concerns over the capricious weather for U.S. soybeans, which are conducive to limiting downside space. As futures are still in the correction territory, buyers can stay on the sidelines or take a hand-to-mouth basis.
Imported rapeseed meal: Imported rapeseed meal drops today, of which it settles down 20-30 yuan at 2,470-2,510 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,510, down 30; and Fujian 2,470, down 10). Feed factories have replaced rapeseed meal substantially with soybean meal due to their small price gap, and mills will continue to keep soybean crush at a high level for its huge import volume arriving at port. Besides, buyers are cautious amid the African swine fever. But there is still huge uncertainty in the outcome of trade talks between China and the United States, and it is unlikely for China and Canada to resolve their conflicts within a short time, so rapeseed supply may get tightened later. Meanwhile, aquaculture has been underway in South China, so that rapeseed meal has been declining in inventory in coastal areas, and the weather is still capricious in the U.S. corn belt. Therefore, short-term rapeseed meal will unlikely collapse and may fluctuate at a narrow range. Buyers can stay on the sidelines or buy on short-term requirements.
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 23,000 tonnes, Shanghai 79,000 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. Typhoon Mun has made its landfall with strong rains in Guangdong and Hainan. 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 30-100 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; demand in downstream is sluggish; today meals on DCE continue to decline and spot soybean meal accordingly falls 10-30 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 6.88)
