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Daily Review on Meal Market in China--11/9/2019

2019-09-11 www.cofeed.com
Today (Sept. 11th), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean closed with gains last night on short covering ahead of the USDA report, but meal futures open higher but to move lower and extend losses on the Dalian Commodity Exchange today because China was to open its market to the largest soybean meal exporter-Argentina. Spot bids for soybean meal drop by 10-20 yuan/tonne from yesterday in tepid trading. Specifically, the price settles at 2,880-2,980 yuan/tonne in coastal areas. (Tianjin 2,980, Shandong 2,920-2,970, Jiangsu 2,890-2,900, Dongguan 2,900-2,910, and Guangxi 2,930-2,940). Another case of the African swine fever was reported in Ningxia Province, and the consumption of feed is now subdued by lower hog amount. Mills in South China are now choked with soybean meal. Besides, trade talks have been resumed and U.S. soybeans are to go marketing soon. Therefore, soybean meal is weighed down to continue its declines in fluctuation. But the bearish atmosphere is not as strong as before due to consecutive price falls, and the import cost of South American soybeans remains high; thus, short-term prices may have limited declines. Buyers with inadequate stocks are suggested to make replenishment in small batch on the dips and remain cautious in driving up prices. 

Imported rapeseed meal: Imported rapeseed meal declines in price today, of which it settles down 20-30 yuan/tonne at 2,280-2,400 yuan/tonne in coastal areas (Guangxi 2320; Guangdong 2,400, down 20; Fujian 2,280, down 20). Something has changed between China and Canada with the detente of Sino-US relations. It is possible for these two countries to improve relationship, for they have both appointed a new ambassador to each other. In addition, Australian rapeseed will go marketing in October, and the supply of rapeseed may be better than expected with increasing inquiry from Chinese buyers. And soybean crush has reached over 180 mln tonnes which has stayed at a high level in recent two weeks. However, the African swine fever is still spreading, and the recovery of demand for meal products from aquaculture in South China is below expectation. There is little improvement in terminal demand. Therefore, the rapeseed meal market is dragged down by these negative factors to fluctuate to adjust. Buyers with insufficient inventory can wait for low and stable prices to make small replenishment on the dips and remain cautious in chasing up prices.

Imported fishmeal: Imported fishmeal keeps steady today with negotiating space at some ports. Quotation at ports: it is priced steadily at 9,100-9,400 yuan/tonne for Peruvian Standard SD with 65% protein content, 9,400-9,600 yuan/tonne for Thai SD with 67% protein content, 9,700-10,100 yuan/tonne for Japanese SD with 67% protein content, and 10,200-10,400 yuan/tonne for super SD with 68% protein content and 9,700-10,200 for old products. Stocks at port: Huangpu 142,000 tonnes, Fuzhou 36,000 tonnes, Shanghai 88,000 tonnes, Tianjin 1,000 tonnes, Dalian 14,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. The prices stay stable from foreign merchants today: it is at 1,160 USD/tonne for Peruvian Standard SD with 65% protein content and 1,330 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. The demand growth is slow from domestic aquaculture, and hog feed also has low demand for fishmeal due to a smaller hog herd under the impact of the ASF. And with continues arrivals of new Peruvian fishmeal, domestic market is in a glut with growing inventory. Domestic fishmeal market is thus restricted. Overall, short-term trend is predicted to be weak. 

Cottonseed meal: Today cottonseed meal stays stable due to the low operation rate and almost non-inventory. However, the demand is affected by the devastating outbreak of African swine fever with the number of live hogs in end-August declining by about 15% month on month. Moreover, soybean meal is dropping away from cottonseed meal. And China's soybean meal market will open to Argentina, the biggest exporter. Today meals on DCE go lower with high open, remaining the decline, and spot soybean meal drops 10-20 yuan/tonne. Cottonseed meal is likely to fluctuate in narrow range before the massive marketing of cottonseed, and then have a risk of falling. Buyers can just wait on the sidelines.

(USD $1=CNY 7.08)