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Daily Review on Meal Market in China--5/11/2019

2019-11-05 www.cofeed.com
Today (Nov. 5), the market for meals in China is shown as follows:
 
Soybean meal: US soybean futures were slightly higher last night, but meal futures edge lower in volatile trading on the Dalian Commodity Exchange today as investors go long in soybean oil due to its surging prices. Spot soybean meal prices drop 10-20 yuan/tonne steadily in tepid trading. Specifically, the price settles at 2,990-3,170 yuan/tonne today. (Tianjin 3,170, Shandong 3,100-3,120, Jiangsu 3,040-3,050, Dongguan 2,990-3,010, and Guangxi 3,020-3,040, Fujian 3,000-3,030). DCE margins for soybean crush have expanded to 240-290 yuan/tonne so far, so mills are importing soybeans and booking profits through meal and oil sales, which is now a curb on soybean meal prices. However, some mills now have to suspend production. Soybean meal stocks thus fell by 13.5% weekly to a multi-year low of 480,000 tonnes in coastal regions, and some mills in North China now are still setting limited delivery quantities. On the whole, soybean meal price is predicted to keep choppy and range-bound in the short term, and maintain a strengthening trend later. But the trend will depend on the demand from downstream buyers, or will come as investors close positions upon falling oil prices. Buyers are suggested to make appropriate replenishment on the dips and remain cautious in chasing after excessively high prices. 
 
Imported rapeseed meal: Imported rapeseed meal price stays stable today, of which it settles at 2,250-2,350 yuan/tonne (Guangxi 2,260; Guangdong 2,350, stable; Fujian 2,260, stable). It is predicted that rapeseed supply still gets tightened due to the tensions between China and Canada, coupled with no cargoes arriving at ports in the late period. Thus, the inventory of soybean meal and rapeseed meal will keep falling, and oil mills tend to prop up prices. But U.S.-China trade negotiations are in good shape, and Chinese oil mills are active in purchasing soybeans due to the good crush margins of futures. Besides, the impact of ASF is not over, and aquaculture will be gradually fading. Therefore, rapeseed meal prices are depressed by these factors. It is predicted that short-term market will 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 goes stable today. 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, 9,900-10,200 yuan/tonne for Japanese SD with 67% protein content, and 10,100-10,600 yuan/tonne for super SD with 68% protein content. With few imports arriving at ports, total stocks at ports are decreasing under a normal consumption pace. Most traders now have tight supplies and are stalling on the sales, so fishmeal prices keep firm at present. But farmers have ended aquaculture in North China as the weather gets cool, which means they will have low demand for fishmeal in the short run. Meanwhile, hog feed consumption is also slow due to the influence of the African swine fever. The demand side will continue to subdue the market. The overall market is predicted to steady with a strengthening trend in the near term. Stocks at port: Huangpu 95,000 tonnes, Fuzhou 31,000 tonnes, Shanghai 51,000 tonnes, Tianjin 1,000 tonnes, Dalian 8,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB prices from foreign merchants today: it is quoted steadily at 1,180 USD/tonne for Peruvian Standard SD with 65% protein content and 1,380 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 1,330 USD/tonne.
 
Cottonseed meal: Cottonseed meal price stays stable with individual declines of 50 yuan/tonne today. As the sow stock began to rebound from the bottom, the production of pig feed in September increased by 10% from the previous month. Thus, the demand may be improved. Besides, cottonseed price stays strong, and the cost increases. All these factors support cottonseed meal market. But the demand is also affected by narrow price gap between soybean meal and cottonseed meal. Additionally, meals on DCE decline slightly with fluctuations due to an arbitrage of buying oils and selling meals, and spot soybean meal stays stable with a decline of 10-20 yuan/tonne today. Therefore, cottonseed meal market is weighed down by these factors, and short-term cottonseed meal prices may fluctuate in a narrow range, but meals market outlook still stays strong overall. Buyers can maintain safety inventory on the dips.
 
(USD $1=CNY 7.04)