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Daily Review on Meal Market in China--11/10/2019

2019-10-11 www.cofeed.com
Today (Oct. 11), the market for meals in China is shown as follows:

Soybean meal: US soybeans edged lower last night on the back of a collapse in corn futures, which came after the US Department of Agriculture disappointed the market in the October crop report. But meal futures continue gains on the Dalian Commodity Exchange today since the report has slashed US soybean production and stocks. Spot soybean meal prices are 20-40 yuan/tonne higher than yesterday in lighter trading. Specifically, the price settles at 3,010-3,130 yuan/tonne. (Tianjin 3,130, Shandong 3,080-3,100, Jiangsu 3,020-3,050, Dongguan 3,010-3,030, and Guangxi 3,010-3,040). With a sharp drop in capacity utilization over China’s National Day holiday, soybean meal stocks were down by 6% to 580,000 tonnes last week. Some mills even limit delivery quantity due to tight supplies. The demand for soybean meal will get improved once there are more pigs in breeding, which will be possible soon as local governments are making great efforts in resuming hog production. Soybean meal prices will probably fluctuate to consolidate in the near term. As for the US-China trade negotiation, President Donald Trump thought it was going very well in the first day, and delegates from both sides were upbeat about reaching a partial deal. In particular, a possible currency deal has sent the offshore exchange rate of Chinese yuan to near 7.10, and traders are bullish on it to be 6.95. This is bearish to domestic soybean meal prices. In addition, the price rises have been influenced by upcoming harvests and sales of new US soybeans. The future trend of soybean meal will largely depend on the outcome of trade negotiations.

Imported rapeseed meal: Imported rapeseed meal rises in price today, of which it settles up 10-20 yuan/tonne at 2,390-2,520 yuan/tonne in coastal areas (Guangxi 2,390, up 10; Guangdong 2,520, up 20; Fujian 2,420, up 20). The supply of imported rapeseed is tightening due to relations between China and Canada, and the crush is predicted to decrease, so oil mills have a strong will to raise prices. However, US soybeans are under the pressure of harvesting and marketing, and African swine fever is still spreading. Also, aquaculture will be fading as the weather gets colder. These are negative to rapeseed meal price and may limit rises, and short-term prices are likely to fluctuate to stay strong. Buyers are suggested to make proper replenishment on the dips and not to chase up prices too high.

Imported fishmeal: Imported fishmeal price is stabletoday after climbing higher for days. It is 9,100-9,500 yuan/tonne for Peruvian Standard SD with 65% protein content, 9,400-9,800 yuan/tonne for Thai SD with 67% protein content, 9,900-10,000 yuan/tonne for Japanese SD with 67% protein content, and 10,100-10,400 yuan/tonne for super SD with 68% protein content. Stocks at port: Huangpu 120,000 tonnes, Fuzhou 35,000 tonnes, Shanghai 73,000 tonnes, Tianjin 1,000 tonnes, Dalian 11,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB prices are stable from foreign merchants today: it is 1,090 USD/tonne for Peruvian Standard SD with 65% protein content and 1,290-1,310 USD/tonne for super SD with 68% protein content. Chilean Standard SD with 65% protein content is 1,100 USD/tonne, and super SD with 68% protein content at 1,300 USD/tonne. It is hard to improve the demand a lot for fishemal in aquaculture in a short time. The ASF also limits the hog feed consumption. This continues to damp the market, making the imported price steady today. But feed plants are making replenishment after the holiday, which has quickened delivery and lessened port inventory, so holders are encouraged to keep their quotations stable. On the whole, the market is predicted to steady in consolidation in the near term. 

Cottonseed meal: Cottonseed meal price stays stable with some fluctuations of 30-250 yuan/tonne today. The cottonseed meal price are depressed by the increasing supply due to a rise of operation rate, the spread of African swine fever, as well as the demand affected by narrowed price gap between soybean meal and cottonseed meal. However, the USDA report in October brings supportive news, and meals on DCE today continue rally. Spot soybean meal mostly up 10-30 yuan/tonne and several mills raise prices slightly. But cottonseed meal supply will increase with the rising operation rate, and short-term cottonseed meal is likely to move sideways with fluctuations but declines may not be too much. Besides, this round of Sino-US high-level consultation is scheduled to hold in Washington from Oct. 10 to 11, and buyers can keep a close eye on the new development.

(USD $1=CNY 7.07)