Today (Jul. 10th), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures continued to post gains buoyed by a lower estimate for soybean production and yield. Chinese and U.S officials conducted a phone call to exchange views on implementing a consensus reached between Chinese President Xi Jinping and U.S. President Donald Trump at their meeting in Osaka, which was the first high-level engagement after the meeting, and Bloomberg said in a report that Treasury Secretary Steven Mnuchin and some other U.S. officials might soon visit China; hence, the two countries are expected to resume their trade talks. On the Dalian Commodity Exchange today, meal futures also rebound moderately. Spot bids for soybean meal go up by 10-30 yuan/tonne, but go down by 20 yuan/tonne among Yihai mills to attract some low-level purchases. Specifically, the price settles at 2,670-2,760 yuan/tonne in coastal areas. (Tianjin 2,760, Shandong 2,710-2,760, Jiangsu 2,710-2,740, Dongguan 2,700-2,730, and Guangxi 2,700-2,730). Soybean meal prices have fallen to a fair level matched with the psychological price of downstream buyers, who have already seen their physical inventories staying low, so the market has welcomed a slight upturn. In addition, U.S. soybean will gradually run into their critical growth period in the second half of July, which may trigger a fresh round of weather speculation, coupled with a possibly bullish USDA report on Thursday evening. All these jointly prop up meal prices to snap off declines to rebound. Nevertheless, the detente in U.S.-China trade relations and huge global supply still remain as restraints on U.S. soybean prices. Besides, some mills are still fully stacked with soybean meal inventory because the African swine fever has caused a sharp decline in breeding pig amount, which has depressed the price bounces. Buyers are suggested to buy appropriately on the dips, but not to chase up prices excessively.
Imported rapeseed meal: Imported rapeseed meal goes up today, of which it settles up 10-20 yuan at 2,400-2,510 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,440, down 20; and Fujian 2,400, stable). Rapeseed meal market will be buoyed by a tight supply outlook of rapeseed in the second half of July since it is difficult for China and Canada to settle their problems in a short time. But the market will be depressed when going upward, for feed factories have made swingeing cuts to rapeseed meal in view of its small price spread with soybean meal. Besides, soybean crush will maintain at a high level due to its huge import in the third quarter, and the lingering African swine fever is also a curb on later demand. Buyers can make proper replenishment on the dips and remain cautious in driving up prices.
Imported fishmeal: Imported fishmeal prices decline today amid tepid shipments at port today. Quotation at ports: it is priced lower by 200-300 yuan at 9,900-10,000 yuan/tonne for Peruvian Fair Average Quality SD with 65% protein content, lower by 200-300 yuan at 10,200-10,300 yuan/tonne for Thai SD with 67% protein content, lower by 300-400 yuan at 10,500-10,600 yuan/tonne for Japanese SD with 67% protein content and lower by 200-300 yuan at 10,900-11,200 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 111,000 tonnes, Fuzhou 25,000 tonnes, Shanghai 78,000 tonnes, Tianjin 1,000 tonnes, Dalian 20,000 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. The demand for fishmeal is restricted by a slow recovery in aquaculture and the African swine fever, and as the shipment lags behind the import, the total inventory has piled up to 240,000 tonnes. With fishmeal in season from Peru, traders are under the pressure to lower their prices. But there is still support from firm prices in foreign markets and price inversions at home and abroad. Overall, fishmeal market is predicted to keep steady in the short run.
Cottonseed meal: Today cottonseed meal stays stable, as the operation rate and output are low and cottonseed price is high. Besides, Chinese and U.S. chief trade negotiators hold telephone conversation and exchanged views on implementing the consensus reached by the two heads of state on the sidelines of the G20 summit in Osaka. According to Bloomberg, U.S. Treasury Secretary Mnuchin may visit China soon and the U.S.-China trade talks are likely to resume. Moreover, U.S. soybeans overnight was further up on the estimate that US soybeans' yield and unit yield will decline, and then meals on DCE today see a moderate rebound with spot soybean meal up 10-30 yuan/tonne. However, the market is curbed 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 for cottonseed meal happens in feed factory; demand in downstream is sluggish. Short-term cottonseed meal is likely to fluctuate narrowly. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.89)
