Today (Jul. 22nd), the market for meals in China is shown as follows:
Soybean meal: The market said that five crush firms could enjoy some 3.0 mln tonnes of soybean import free of the additional tariff and Xinhua reported that Chinese businesses had made inquiries with U.S. exporters to buy crops and agricultural products and applied for the lifting of tariffs. Therefore, U.S. soybean futures posted sharp gains last Friday on improved China-U.S. relationship, but meal futures pare gains after lower opens on the Dalian Commodity Exchange today due to this bearish news on the domestic market. Spot bids for soybean meal mostly fall by 10-20 yuan/tonne and several Yihai factories follow foreign market to increase by 20 yuan/tonne, and the trading is weaker as buyers tend to wait on the sidelines. Specifically, the price settles at 2,750-2,800 yuan/tonne in coastal areas. (Tianjin 2,800, Shandong 2,760-2,800, Jiangsu 2,750-2,800, Dongguan 2,750-2,800, and Guangxi 2,780-2,800). Soybean import will be enormous in the third quarter, especially as Chinese importers bought a total of 20-25 cargoes of South American soybeans for improved crush margins last week, while meal demand is still subject to the contagious African swine fever, which has been reported frequently in the South, Southwest, Hunan and Hubei; hence, soybean meal price is curbed. But the weather speculation on U.S. soybean crop has yet finished, and domestic soybean meal has traded better with its inventory declining by 6% to 850,000 tonnes weekly. And these will help limit the price declines. Overall, short-term soybean meal prices may follow futures to fluctuate and buyers can wait or take a hand-to-mouth basis.
Imported rapeseed meal: Imported rapeseed meal declines in price today, of which it settles down by 50-70 yuan at 2,330-2,450 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,410, down 70; and Fujian 2,330, down 60). Feed mills have substantially replaced rapeseed meal with soybean meal due to their largely narrowed price gap, sending rapeseed meal to increase by 5% to 36,000 tonnes last week. Moreover, soybean crush still stays at a high level due to its huge import, while meal demand is subject to the outbreaks of the African swine fever and losses in broiler breeding. Therefore, rapeseed meal price is dragged down. But rapeseed supply may gradually get tightened as it is difficult for China and Canada to settle their issues in a short time, and rapeseed meal price is expected to rebound after this round of declines. Buyers can wait for low and stable price to make proper replenishment.
Imported fishmeal: Imported fishmeal prices stay stable with little negotiating space today. Quotation at ports: it is priced steadily at 9,900-10,000 yuan/tonne for Peruvian Fair Average Quality SD with 65% protein content, 10,200-10,300 yuan/tonne for Thai SD with 67% protein content, 10,500-10,600 yuan/tonne for Japanese SD with 67% protein content and 10,900-11,200 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 119,000 tonnes, Fuzhou 29,000 tonnes, Shanghai 81,000 tonnes, Tianjin 1,000 tonnes, Dalian 22,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot price (FOB) in foreign market today: it is 1,380 USD/tonne for Peruvian Fair Average Quality SD fishmeal with 65% protein content and 1,580 USD/tonne for Prime SD fishmeal with 68% protein content. Chilean Fair Average Quality fishmeal with 65% protein content is 1,360 USD/tonne, and prime with 68% protein content at 1,590 USD/tonne. The demand for fishmeal is low from aquaculture and due to the African swine fever, and the market now has a total inventory of 258,000 tonnes with the import of new products from Peru. Due to such bearish fundamentals, fishmeal market is predicted to keep steady with slight declines in the short run.
Cottonseed meal: Cottonseed meals today are stable with some rises of 50-100 yuan/tonne, when operation rate keep at a low level; cottonseed price is high; mills are waiting for higher offers. However, cottonseed meal is weighted on when African swine fever continues with recent frequent outbreak in South China, Southwest China, Hunan and Hubei province; the delivery is slow as the substitution of soybean meal for cottonseed meal happens in feed factory amid a narrowed price spread between soybean meal and cottonseed meal; five Chinese crushers have shared the import quota of 3,000,000 tonnes soybeans with additional tariffs exemption, according to market rumours; some Chinese enterprises have inquired with U.S. exporters about the purchase of agricultural produce and applied for the lifting of tariffs, according to Xinhua; and today meals on DCE fall back with low open, and spot soybean meal mostly declines 20-30 yuan/tonne. Short-term cottonseed meal is likely to move sideways. Buyers are suggested to stay on the sideline or take a hand-to-mouth buying strategy.
(USD $1=CNY 6.88)
