Today is 08/09/2020

Daily Review on Meal Market in China--23/8/2019

Today (Aug. 23rd), the market for meals in China is shown as follows:

Soybean meal: The final day of the Pro Farmer Midwest Crop Tour reported an improving yield potential of U.S. soybeans in some regions of Iowa and Minnesota, so U.S. soybeans closed lower last night. But meal futures expand gains after higher opens on the Dalian Commodity Exchange today. Spot bids for soybean meal follow to go up by 10-30 yuan/tonne to attract some low-level purchases, but the trading remains tepid at high levels. Specifically, the price settles at 2,880-2,970 yuan/tonne in coastal areas. (Tianjin 2,970, Shandong 2,910-2,940, Jiangsu 2,890-2,960, Dongguan 2,900-2,920, Guangxi 2,920-2,950 and Fujian 2,880-2,950). Brazilian soybeans see high premiums on a tight supply outlook. And the demand for soybean meal is boosted as the spot market is stocking up for the Mid-autumn festival, so that the inventory pressure has slightly decreased. Before the appearance of marketing pressure of U.S. soybeans, soybean meal price is expected to fluctuate to edge higher in China. But White House economic adviser Larry Kudlow said on Wednesday that China and the United States agreed to have another telephone talk in the next few days after a constructive exchange on Wednesday, which is a sign that the two countries are seeking to resolve their trade disputes. Besides, the rampant African swine fever will continue to curb the demand for meals. Therefore, soybean meal prices will have limited rises. Buyers are suggested to make appropriate replenishment on the dips, but not to drive up prices excessively. 

Imported rapeseed meal: Imported rapeseed meal rises in price today, of which it settles up 10-20 yuan at 2,440-2,500 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,460, up 20; and Fujian 2,440, up 20). Rapeseed supply is getting tightened due to pending issues between China and Canada, which continues boosting rapeseed meal prices. But White House economic adviser Larry Kudlow said on Wednesday that China and the United States agreed to have another telephone talk in the next few days after a constructive exchange on Wednesday, which is a sign that the two countries are seeking to resolve their trade disputes. This is bearish to domestic market, so rapeseed meal apparently slows down rises today. Moreover, The African swine fever has severely hit Hunan, Hubei, Guangdong, Guangxi and Sichuan and has been reported in Jiangsu recently. And the demand for rapeseed meal has already influenced by its small price gap with soybean meal. Therefore, rapeseed meal price will have limited upward space. Buyers are suggested to make appropriate replenishment on the dips, but not to drive up prices excessively. 

Imported fishmeal: Imported fishmeal price stays stable to edge lower today with some negotiating space. Quotation at ports: it is priced lower by 200 yuan at 9,600-9,700 yuan/tonne for Peruvian Standard SD with 65% protein content, lower by 200 yuan at 9,800-10,200 yuan/tonne for Thai SD with 67% protein content, steadily at 10,100-10,400 yuan/tonne for Japanese SD with 67% protein content, and lower by 200 yuan at 10,500-10,900 yuan/tonne for super SD with 68% protein content and steadily at 10,000-10,400 for old products. Stocks at port: Huangpu 135,000 tonnes, Fuzhou 34,000 tonnes, Shanghai 86,000 tonnes, Tianjin 1,000 tonnes, Dalian 19,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. The prices keep steady in foreign markets today: it is 1,270 USD/tonne for Peruvian Standard SD with 65% protein content and 1,380 USD/tonne for super SD with 68% protein content. Chilean Standard SD with 65% protein content is 1,300 USD/tonne, and super SD with 68% protein content at 1,520 USD/tonne. Due to a slowdown in demand growth from aquaculture and a smaller hog herd subject to the African swine fever, fishmeal consumption is limited. Meanwhile, domestic inventory stays at a high level with continuous arrivals of new fishmeal from Peru. Holders have lowered down their quotations as they are under sales pressure and in a rush for cash, fishmeal prices are also restricted. Overall, short-term fishmeal market is predicted to stay stable with a weak trend.

Cottonseed meal: Today cottonseed meal mostly stays stable with a rise of 70 yuan/tonne for some prices due to the low operation rate and low cottonseed meal inventory. And today meals on DCE further rise with high open, and spot soybean meal lift 10-30 yuan/tonne accordingly. However, the demand is affected by the devastating outbreak of African swine fever and the hog feed sales in July decline by almost 40% from the same period last year. Moreover, soybean meal is dropping away from cottonseed meal. Short-term prices are likely to fluctuate with strong trend and buyers had better maintain proper stock level upon low price, and not chase high. White House economic adviser Larry Kudlow said the deputies' call with Chinese officials on Wednesday was quite constructive and the deputies had agreed to another conference call. The US-China trade tension may ease, which should be paid attention to.

(USD $1=CNY 7.06)