Today is 03/28/2024

Daily Review on Meal Market in China--9/8/2019

2019-08-09 www.cofeed.com
Today (Aug. 9th), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean closed sharply higher last night on worries about a lower production under dry weather conditions, and meal futures also extend early gains on the Dalian Commodity Exchange today. Spot bids for soybean meal go up by 10-30 yuan/tonne from yesterday, attracting low-level purchases. Specifically, the price settles at 2,820-2,900 yuan/tonne in coastal areas. (Tianjin 2,900, Shandong 2,870-2,880, Jiangsu 2,860-2,880, Dongguan 2,860-2,880, Guangxi 2,850-2,870 and Fujian 2,820-2,850). Due to growing tensions between Beijing and Washington and the devaluation of RMB exchange rate below 7, soybean import cost is increasing amid rising premiums of South American soybeans. Meanwhile, soybean meal has seen its trading up by 102.8% weekly to 1.15 mln tonnes as of this Thursday. Therefore, short-term soybean meal will likely take the strong trend. However, mills have picked up their operation rate in recent two weeks due to huge soybean arrivals at port. Besides, meal consumption is still slow due to the lingering African swine fever (ASF). Sichuan, Hubei and Hunan are the worst-hit provinces by the ASF, of which the hog herd in Sichuan has declined by more than 50%. As a result, soybean meal just posts some slight price gains, far smaller than soybean oil. Buyers are suggested to make appropriate replenishment on the dips and not to drive up prices excessively, and participants can focus on the USDA report next week. 

Imported rapeseed meal: Imported rapeseed meal rises in price today, of which it settles up 10-20 yuan at 2,470-2,520 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,470, up 10; and Fujian 2,470, up 20). Short-term rapeseed meal prices fluctuate to rebound moderately due to the tight supply outlook of rapeseed over pending issues between Beijing and Ottawa. However, the overall demand for meals remains dismal due to the African swine fever, and rapeseed meal has seen its percentage in aquatic feed dropping to a fresh low due to its smaller price gap with soybean meal and replaced by sunflower meal in poultry feed. And soybean arrival at port is predicted to be a huge number. All these will set a limit to price rises of rapeseed meal. Buyers can replenish on the dips and remain cautious in driving up prices. 

Imported fishmeal: Imported fishmeal price stays stable today with a price gap of 200-400 yuan/tonne between new products and old ones. Quotation at ports: it is priced steadily at 9,900-10,000 yuan/tonne for Peruvian Standard SD with 65% protein content, 10,000-10,200 yuan/tonne for Thai SD with 67% protein content, 10,300-10,500 yuan/tonne for Japanese SD with 67% protein content and 10,700-11,100 yuan/tonne for super SD with 68% protein content. Stocks at port: Huangpu 131,000 tonnes, Fuzhou 32,000 tonnes, Shanghai 83,000 tonnes, Tianjin 1,000 tonnes, Dalian 21,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Foreign merchants have quoted steadily today: it is 1,320 USD/tonne for Peruvian Standard SD with 65% protein content and 1,520 USD/tonne for super SD with 68% protein content. Chilean Standard SD with 65% protein content is 1,360 USD/tonne, and super SD with 68% protein content at 1,590 USD/tonne. Fishmeal market is negative as holders are willing to carry out shipment and some have even lowered down their prices in view of high stocks at port amid tepid demand at home and constant arrivals of new products from Peru. But the market is receiving support from price inversions at home and abroad. Overall, fishmeal market is predicted to post slight declines in the short run.

Cottonseed meal: Cottonseed meals today are stable with some rises of 30-100 yuan/tonne, when operation rate keep at a low level amid a low level of inventory; there are still some rigid demands in downstream; today meals on DCE rise with high open, and spot soybean meal is up 10-30 yuan/tonne. However, the demand is affected by the devastating outbreak of African swine fever especially in Sichuan, Hubei, Hunan, with the number of China's live hogs in July down 10%  month on month, according to our investigation. Moreover, the narrow price spread between soybean meal and cottonseed meal curbs cottonseed meal market as well. Short-term prices are likely to go strong. Buyers had better maintain proper stock level upon low price, and not chase high.

(USD $1=CNY 7.01)