Today is 08/08/2020

Daily Review on Meal Market in China--28/8/2019

Today (Aug. 28th), the market for meals in China is shown as follows:

Soybean meal: U.S. soybeans closed with losses, as the market was expected for improving crop conditions under favorable weather in the Midwest and the USDA increased its good-to-excellent rating for soybean crop this by 2 percentage points to 55%. Meal futures fluctuate fractionally on the Dalian Commodity Exchange today. Spot bids for soybean meal steadily fluctuate by 10-20 yuan/tonne in less trading. Specifically, the price settles at 2,960-3,050 yuan/tonne in coastal areas. (Tianjin 3,050, Shandong 2,960-3,030, Jiangsu 2,960-3,020, Dongguan 2,950-3,010, and Guangxi 2,980-3,010). Soybean meal prices are checked by two factors: one, soybean crush is expected to go above 1.80 mln tonnes both this week and next week due to slightly eased soybean meal inventory; two, the consumption of hog feed has posted a substantial decline of nearly 40% year on year due to the rampant African swine fever (ASF). However, the import cost has been lifted after China’s yuan fell sharply to 7.16. Besides Brazilian soybeans see higher premiums on a tight supply outlook in the fourth quarter, and mills have slightly quickened their soybean meal delivery. In addition, China and the United States are less likely to reach a deal in the short term. These will help limit price declines. The overall trend of soybean meal market will probably fluctuate to stay strong, but the short-term market may fluctuate frequently for capricious signs from trade disputes, so buyers can stay on the sidelines for the moment. 

Imported rapeseed meal: Imported rapeseed meal steadily fluctuates in price today, of which it fluctuates 10 yuan settle at 2,430-2,500 yuan/tonne in coastal areas. (Guangxi not offered; Guangdong 2,460, stable; and Fujian 2,430, stable). Although the price gap between soybean meal and rapeseed meal has been widened to 570 yuan/tonne, feed plants have cut down the mix of rapeseed meal to the lowest, almost to zero in poultry feed, hog feed and high-grade aquatic feed and also to 2-5% in ordinary feed. Besides, mills may raise soybean crush to above 1.80 mln tonnes both this week and next week due to eased soybean meal inventory. In addition, buyers are cautious, for the ASF is undermining the overall demand for meal products. But rapeseed is in tight supply because Beijing and Ottawa have yet settled their issues, so that mills have no choice but to lower down rapeseed crush. On the whole, short-term rapeseed meal market may fluctuate at a narrow range, but may also stay relatively strong. Buyers can wait for low and stable prices to make appropriate replenishment on the dips. 

Imported fishmeal: Imported fishmeal price stays stable today with some negotiating space. Quotation at ports: it is priced steadily at 9,600-9,700 yuan/tonne for Peruvian Standard SD with 65% protein content, 9,800-10,200 yuan/tonne for Thai SD with 67% protein content, 10,100-10,400 yuan/tonne for Japanese SD with 67% protein content, and 10,500-10,900 yuan/tonne for super SD with 68% protein content and 10,000-10,400 for old products. Stocks at port: Huangpu 136,000 tonnes, Fuzhou 34,000 tonnes, Shanghai 88,000 tonnes, Tianjin 1,000 tonnes, Dalian 18,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. The prices keep steady in foreign markets today: it is 1,260 USD/tonne for Peruvian Standard SD with 65% protein content and 1,370 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, fishmeal prices are thus restricted. But there is still support from growing import cost with the substantial devaluation of Chinese yuan. Overall, short-term fishmeal market is predicted to stay stable with a weak trend.

Cottonseed meal: Cottonseed meals today are stable with some rises of 50-150 yuan/tonne, due to the low operation rate and stocks. However, the market is weighted on when the hog feed consumption plunges by 40% year on year owing to the devastation of ASF; soybean meal is dropping away from cottonseed meal; today spot soybean meal is stable with a drop of 10-20 yuan/tonne. Short-term cottonseed meal is likely to fluctuate with strong trend, and buyers should not chase high too far.

(USD $1=CNY 7.08)