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Daily Review on Meal Market in China--12/11/2019

2019-11-12 www.cofeed.com
Today (Nov. 12), the market for meals in China is shown as follows:

Soybean meal: Trump said that he has not agreed to cancel US tariffs on Chinese imports, dampening the optimism for a trade deal between the two countries. US soybean futures fell sharply last night on an accelerating harvest pace under dry weather. Meal futures also continue to decline on the Dalian Commodity Exchange today. Spot soybean meal prices drop by 20-40 yuan/tonne in tepid trading. Specifically, the price settles at 2,890-3,100 yuan/tonne today. (Tianjin 3,100, Shandong 3,030-3,060, Jiangsu 2,980-3,000, Dongguan2,890-2,920, and Guangxi 2930-2960, Fujian 2,920-2,960). The strong performance is attracting traders to go long in oils. And hog prices have fallen 12% from late October to an average of 36.48 yuan/kg, which has subdued the market sentiment. The demand from aquaculture in South China is also going into the slack season. Therefore, soybean meal prices are falling. However, domestic importers who have been offered the duty exemptions are required to pay the 33% duties first so that some oil mills with limited cash flow are delaying the unloading. It is said that there are 2 million tonnes of soybeans under custody at northern ports of China, waiting to be offloaded. Due to such a slow pace, commercial soybeans are in tight supply at present, so that mills have to keep low crush, sending soybean meal stocks to fall by 14% to 410,000 tonnes last week. Mills now are setting limited quantities for delivery in northern and in some eastern regions of China. US soybeans now also decline ahead of marketing, in addition to the arbitrage of buying oils and selling meals in China, so meal prices will continue to drop. But soybean meal has tight supplies now, so it is not suggested to go short excessively. Buyers can wait for low and stable prices to make appropriate replenishment. 

Imported rapeseed meal: Imported rapeseed meal declines in price today, of which it settles down 10-20 yuan/tonne at 2,130-2,210 yuan/tonne in coastal areas (Guangxi 2,180, down 20; Guangdong not offered; Fujian not offered). The overall oils show a strong trend, and traders keep buying oils and selling meals for an arbitrage. Besides, Southern aquaculture is gradually seeing an off-season period, and there is not much improvement in poor demand for meals under the lingering African swine fever. Thus, rapeseed meal prices are depressed by all these factors above. However, some factories have no rapeseed arriving at ports due to the tight supply of rapeseed under pending issues between China and Canada, so the operation rate of oil plants decreases, which limits declines of short-term prices. Meal futures have not stopped falling yet, so buyers can wait for low and stable prices to make replenishment.

Imported fishmeal: Imported fishmeal price goes stable with some declines 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 partially down 100 yuan at 10,100-10,600 yuan/tonne for super SD with 68% protein content. With new-season investigations underway and the good fishing prospect in Peru, traders are offering lower price to reduce their stocks at ports in China. But the fishing quotas has not been released, so most traders are still waiting on the sidelines. The overall market is predicted to keep steady in the near term. Stocks at port: Huangpu 92,000 tonnes, Fuzhou 32,000 tonnes, Shanghai 47,000 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 declines of 10-30 yuan/tonne today. The demand is affected by narrowed price gap between soybean meal and cottonseed meal, and some factories have a low pace of delivery. Besides, meals on DCE today drop further, and then spot soybean meal down by 20-40 yuan/tonne. Therefore, cottonseed meal market is weighed down by these factors. But the demand for meals is hopeful to pick up because of a rise in stocks of pig and laying fowl. Also, cottonseed price is high. And these factors limit the declines of cottonseed meal price. Thus, short-term cottonseed meal market may move sideways with fluctuations. Buyers can make proper replenishment upon low and stable prices.

(USD $1=CNY 6.99)