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Daily Review on Meal Market in China--18/9/2019

2019-09-18 www.cofeed.com
Today (Sept. 18th), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean fell with the losses in crude oil price and on good weather conditions in the Midwest, but meal futures inch higher on the Dalian Commodity Exchange today with the end of the arbitrage of buying oils and selling meals. Spot soybean meal prices steadily increase by 10-20 yuan/tonne in tepid trading, in spite of some low-level purchases. Specifically, the price settles at 2,880-2,990 yuan/tonne in coastal areas. (Tianjin 2,990, Shandong 2,940-2,970, Jiangsu 2,890-2,920, Dongguan 2,880-2,890, and Guangxi 2,900-2,910). Soybean meal inventory dropped by 6% to 742,000 tonnes due to the demand for the Mid-autumn and the decline in soybean crush last week. Moreover, downstream buyers intend to stock in advance for the National Day as some mills in Shandong and northern regions have to suspend production for the parade, and some northern mills have already completed sales quantity in September. Thanks to the mood of stalling sales, meal prices edge higher today. But some mills in South China are urging customers to quicken delivery as they are still choked with meal inventory due to the smaller hog herd under African swine fever. The upcoming harvest and sales of US soybeans, the growing import of US soybeans at low prices and the detente in trade disputes both keep meal price rises under check. Buyers are suggested to replenish appropriately on the dips, but not to drive prices higher. 

Imported rapeseed meal: Imported rapeseed meal rises slightly in price today, of which it settles up 10 yuan/tonne at 2,290-2,380 yuan/tonne in coastal areas (Guangxi 2,300, up 10; Guangdong 2,380, stable; Fujian 2,310, up 10). The supply of rapeseed is getting tightened due to the unsolved issues between China and Canada, so oil mills tend to prop up prices. But the trade war has been easing. Also, U.S. soybeans will be harvested and go marketing. Moreover, the hog herd is continuously decreasing with the lingering African swine fever, so there is not much improvement in the demand for rapeseed meal. Thus, rapeseed meal market is dragged down to fluctuate at a narrow range in the short term. Buyers with insufficient inventory can make proper replenishment on the dips and remain cautious in chasing up prices.

Imported fishmeal: Imported fishmeal keeps steady to decline today with some negotiating space. Quotation at ports: it is priced quoted steadily at 9,100-9,400 yuan/tonne for Peruvian Standard SD with 65% protein content and 9,400-9,600 yuan/tonne for Thai SD with 67% protein content, lower by 100 yuan at 9,700-10,000 yuan/tonne for Japanese SD with 67% protein content, and lower by 100 yuan at 10,100-10,300 yuan/tonne for super SD with 68% protein content and lower by 100 yuan at 9,700-10,100 for old products. Stocks at port: Huangpu 137,000 tonnes, Fuzhou 36,000 tonnes, Shanghai 87,000 tonnes, Tianjin 1,000 tonnes, Dalian 14,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. The prices steady from foreign merchants today: it is 1,140-1,160 USD/tonne for Peruvian Standard SD with 65% protein content and 1,310-1,330 USD/tonne for super SD with 68% protein content. Chilean Standard SD with 65% protein content is  1,200 USD/tonne, and super SD with 68% protein content 1,420 USD/tonne. The demand growth is small from domestic aquaculture, and hog feed also has low demand for fishmeal due to a smaller hog herd under the impact of the ASF. Under tepid terminal demand and with continues arrivals of new Peruvian fishmeal, domestic inventory keeps growing and holders are under sales pressure. The overall fishmeal market is thus restricted and predicted to remain weak in the short term. 

Cottonseed meal: Today cottonseed meal stays stable due to the low operation rate and almost non-inventory. Besides, owing to finished arbitrage of buying oils and selling meals, today meals on DCE slightly rise, spot soybean meal is stable with a rise of 10-20 yuan/tonne. However, the market is weighted on when the demand is affected by the devastating outbreak of African swine fever with the number of live hogs in August declining by 9.8% month on month, by 38.7% year on year, according to Ministry of Agriculture and Rural Affairs; cottonseed meal is dropping away from cottonseed meal. Soybean meal is likely to stay stable with adjustment in narrow range before the massive marketing of cottonseed, and then have a risk of falling. Buyers are suggested to take a hand-to-mouth buying strategy.

(USD $1=CNY 7.07)