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Daily Review on Meal Market in China--20/9/2019

2019-09-20 www.cofeed.com
Today (Sept. 20th), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures firmed on Thursday on strong weekly export sales data and face-to-face trade talks between US and Chinese deputies in Washington, but meal futures are in range-bound trading on the Dalian Commodity Exchange today. Spot soybean meal prices steadily fluctuate by 10-20 yuan/tonne to attract some low-level purchases. Specifically, the prices settle at 2,880-2,990 yuan/tonne in costal regions (Tianjin 2,990, Shandong 2,950-2,980, Jiangsu 2,900-2,930, Dongguan 2,880-2,900, and Guangxi 2,910-2,930). There are a myriad of negative factors on meal prices, ranging from upcoming harvest and sales of US soybean, the huge imports of US soybean and the ongoing trade talks, to the the spread of African swine fever which cuts the hog herd to a low level. But some buyers intend to stock in advance for the National Day as most mills in Shandong and northern regions have to suspend production for the parade and holidays. Farmers now are making profits in poultry, and local governments are strongly supporting the hog breeding, so feed sales volume is recovering. Besides, US soybean harvest is predicted to be nearly one month late this year, with uncertain weather conditions forecast in coming weeks. Domestic crushers are supporting prices, so meal futures are climbing higher after dropping in early trading, and short-term soybean meal prices are predicted to remain resilient and range-bound. Buyers can make appropriate replenishment on the dips. 

Imported rapeseed meal: Imported rapeseed meal declines slightly in price today, of which it settles down 10 yuan/tonne at 2,300-2,390 yuan/tonne in coastal areas (Guangxi 2,320, stable; Guangdong 2,390, stable; Fujian 2,320, stable). The import of low-cost U.S. soybeans is increasing with a detente in trade war. Also, U.S. soybeans will be harvested and go marketing soon. However, the African swine fever is still spreading, and the recovery of demand for meal products from aquaculture in South China is below expectation. So there is little improvement in demand for rapeseed meal. Besides, the marketing of new Australian rapeseed fills part of gap of Canadian rapeseed. In short, the rapeseed meal market is dragged down by all these negative factors above to fluctuate to adjust. Additionally, the rapeseed supply gets tightened due to the blocked imports of Canadian rapeseed, which also limits the price declines of rapeseed meal. Therefore, buyers with insufficient inventory can wait for stable prices to make proper replenishment on the dips and remain cautious in chasing up prices.

Imported fishmeal: Imported fishmeal keeps steady today with some negotiating space. Quotation at ports: it is priced quoted steadily at 9,100-9,300 yuan/tonne for Peruvian Standard SD with 65% protein content, 9,400-9,500 yuan/tonne for Thai SD with 67% protein content, 9,700-10,000 yuan/tonne for Japanese SD with 67% protein content, and 10,100-10,300 yuan/tonne for super SD with 68% protein content and 9,700-10,000 for old products. Stocks at port: Huangpu 136,000 tonnes, Fuzhou 37,000 tonnes, Shanghai 86,000 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 for fishmeal from domestic aquaculture remains low, so does from the hog feed, for the African swine fever is ravaging the hog herd. Concerned about slow consumption in farming, feed mills make no bulk purchases. With high stockpiles at ports, holders are under sales pressure. The overall domestic fishmeal market is thus restricted and predicted to stay stable to go relatively weak in the short term. 

Cottonseed meal: Today cottonseed meal mostly stays stable with a rise of 50 yuan/tonne for some prices due to the low operation rate and almost non-inventory. 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 see a proper drop. Buyers are suggested to stay on the sideline or take a hand-to-mouth buying strategy.

(USD $1=CNY 7.07)