Today (Nov. 8), the market for meals in China is shown as follows:

Soybean meal: US soybean exports rose by 92% from the previous week, including 956,300 tonnes of sales bound for China; China’s Ministry of Commerce confirmed that China and US agreed to cancel the additional tariffs in different phases; and the market was expecting some cuts in US soybean production and stocks in the USDA report on Friday night. US soybean futures rose last night. 

And meal futures move higher in spite of lower opens on the Dalian Commodity Exchange today as investors  stop going long in oils. Spot soybean meal prices steadily increase by 10-20 yuan/tonne with more low-level purchases possibly. Specifically, the price settles at 2,970-3,160 yuan/tonne today. (Tianjin 3,160, Shandong 3,060-3,120, Jiangsu 3,010-3,040, Dongguan 2,970-2,980, and Guangxi 2,990-3,000, Fujian 2,980-3,010). 

Chinese importers now have to pay about 60 million yuan for each cargo of US soybeans under the total 33% duties, but the government will refund it to them later according to the some duty exemptions. And the problem is that some mills with shortages in funds will also face the shortages of soybeans, because the cargoes can be unloaded only after the duties are paid. Domestic soybean meal stocks now stay at a multi-year low, and mills are setting strict delivery quantity in the northern and northeastern areas. Besides, hog in breeding saw a month-on-month increase of 1.62% for the first time since the African swine fever, and sow head also rose by 3.77% for a second straight month, according to Cofeed. The margins for breeding owned piglet reach 3,250 yuan, which encourages large farms to increase the amount and also to breeding their owned sows. Therefore, the demand for soybean meal is expected to recover, and the prices thus rebound slightly. 

But importers are buying up US soybeans amid smooth trade negotiations and due to good crush margins, and hog prices are also falling, so there is limited space for the upward trend. The prices will remain strengthening due to an over 24% cut in US soybean production and the inflation expectation in China. Buyers can wait for low and stable prices to make moderate replenishment and remain cautious in chase after excessively high prices. 

Imported rapeseed meal: Imported rapeseed meal stays stable with slight rises in price today, of which it settles up 10 yuan/tonne at 2,210-2,320 yuan/tonne in coastal areas (Guangxi 2,220, stable; Guangdong 2,210, up 10; Fujian 2,210). The supply of rapeseed will be tightening over the next few months, and domestic inventory of soybean meal and rapeseed meal will keep falling due to the decreasing operation rate. Besides, there are steep cuts in U.S. soybeans production and inflation expectations. Thus, the meals market outlook is still bullish overall. On the other hand, the rises of rapeseed meal prices are also limited as the China-U.S. trade war is easing; aquaculture is also gradually fading due to the colder weather; the impact of ASF is not over. And short-term rapeseed meal mainly fluctuates to stay strong. Buyers are suggested to make proper replenishment on the dips and not to drive up prices excessively.

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 new-season investigations underway, there is news that the catch totaled 6,828 tonnes in the centre-north regions on November 6, 64 ships for fishing and 106 tonnes for each ship, fish size at around 14cm and no juvenile fish. The good fishing prospect in Peru is a curb on the fishmeal market in China. But the Peruvian government has not yet released catch quotas, and traders with tight supplies are stalling on the sales, which will continue to support the market. The overall market is predicted to keep steady in the near term. 

Stocks at port: Huangpu 94,000 tonnes, Fuzhou 32,000 tonnes, Shanghai 48,000 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 some rises of 20-50 yuan/tonne today. According to Cofeed, nationwide hog herd has rebounded for the first time, of which it up by 1.62% from last month. And the sow stock has increased by 3.77% from the previous month, the second successive monthly rebound. As breeding enterprises have started to recover hog breeding, the demand for meals is hopeful to pick up. At present, factories basically have no cottonseed meal stock, and cottonseed price is high. Besides, meals on DCE today move higher with low opens, and spot soybean meal stays stable with a rise of 10-20 yuan/tonne. Therefore, cottonseed meal market is supported by these factors. But the demand is affected by narrowed price gap between soybean meal and cottonseed meal. Additionally, the Chinese Commerce Ministry said China and U.S. have agreed to roll back tariffs in phases with the pact going on, so U.S.-China relations have further eased, which is bearish for cottonseed meal market. And short-term cottonseed meal price may fluctuate in a narrow range. Under the background of more than 24% of cut in U.S. soybean production and domestic inflation expectations, meals market outlook is likely to stay strong overall.