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Daily Review on Meal Market in China--23/9/2019

2019-09-23 www.cofeed.com
Today (Sept. 23), the market for meals in China is shown as follows:

Soybean meal: President Donald Trump said he was “not looking for a partial deal” with Beijing, and the Chinese trade delegation canceled a planned visit to US farms, which triggered the concern for no breakthrough in bilateral trade talks last week. US soybeans thus fell last Friday, and meal futures are narrowing gains in spite of continued moderate rises on the Dalian Commodity Exchange today. Spot soybean meal prices increase by 10-30 yuan/tonne to attract some low-level purchases. Specifically, the price settles at 2,890-3,010 yuan/tonne in coastal regions (Tianjin 3,010, Shandong 2,980, Jiangsu 2,920-2,940, Dongguan 2,890-2,920, and Guangxi 2,910-2,920). Buyers intend to make preparations in advance for the National Day as most mills in Shandong and northern regions have to suspend production for the parade and holidays, and some Shandong mills are setting limited delivery of soybean meal on account of improved speed at the moment. Farmers are making profits now due to price rises in pork and poultry meat ahead of the holidays, and local governments are offering strong support to hog breeding. Soybean meal has a buoyant market in this aspect. However, the disease is still spreading among hog herd in China, and US soybeans in the new season are about to be harvested and go marketing. And low-priced US soybean imports are increasing ahead of the trade talks, which is reported by Bloomberg to be held on October 10. These are bearish to domestic meal prices. Short-term soybean meal prices may maintain narrow fluctuations, and buyers are suggested to make appropriate replenishment on the dips but not to drive up prices excessively. 

Imported rapeseed meal: Imported rapeseed meal rises slightly in price today, of which it settles up 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).Rapeseed supply gets tightened amid the pending issues between China and Canada, which causes the rapeseed crush to keep falling back sharply in coastal areas.Besides, rapeseed meal inventory has dropped for the second straight week, so rapeseed meal price is buoyed by a decrease of inventory by 21% to 30,000 tonnes in coastal areas last week.However, the mix of rapeseed meal is still low, and the demand for meal products is delicate due to the lingering swine fever. There is not much improvement in demand for meal, and the harvest and marketing of US soybeans is approaching. Thus, the upward space of rapeseed meal price may be limited by these factors, and price will fluctuate to stay strong at a narrow range before holiday.According to Bloomberg, China and U.S. will hold a high-level trade talk around Oct.10th. Therefore, rapeseed meal price may be in a gloomy outlook after the holiday.Buyers are suggested to make proper replenishment on the dips and not to drive up prices excessively.

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. FOB prices are down from foreign merchants today: it is down 50 USD to 1,090 USD/tonne for Peruvian Standard SD with 65% protein content and down 20 USD to 1,290 USD/tonne for super SD with 68% protein content. Chilean Standard SD with 65% protein content is lower by 100 USD at 1,100 USD/tonne, and super SD with 68% protein content lower by 120 USD at 1300 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 stays stable when the operation rate is low and inventory is almost zero; market doubts whether there will be a progress in trade war after President Trump rejected suggestions that the U.S. would accept a partial trade agreement with China according to Bloomberg, and Chinese trade delegation called off farm visits; today meals on DCE extend a mild rise, spot soybean meal goes up 10-30 yuan/tonne. However, the market is weighted on when the demand is affected by the devastating outbreak of African swine fever; 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. But buyers should pay attention to the latest news about trade talks amid a high-level trade consultation on around Oct. 10.

(USD $1=CNY 7.07)