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Daily Review on Meal Market in China--15/11/2019

Today (Nov. 15), the market for meals in China is shown as follows:

Soybean meal: US Private exporters reported export sales of 129,000 tonnes of soybeans for delivery to China, which made US soybean futures end higher last night. Meal futures drop slightly after lower opens on the Dalian Commodity Exchange today. Spot soybean meal prices steadily decline by 10-20 yuan/tonne, and the trading remains good both for both spot and forward months. Specifically, the price settles at 2,910-3,100 yuan/tonne today. (Tianjin 3,100, Shandong 3,030-3,050, Jiangsu 2,960-2,990, Dongguan 2,900-2,910, and Guangxi 2,900-2,940, Fujian 2,900-2,940). Prices of hog continue the sharp retreat recently, which has weakened the bullish market sentiment. The African swine fever has again shown the tendency to spread among some regions, and the demand from aquaculture in South China is going into the slack season. Besides, China’s Customs has issued an announcement to lift the restrictions on imports of US poultry meat. These are all restraints in meal prices. But some soybean imports now are for the state reserve, so mills have no choice but to keep low operation rate for a lack of commercial supplies. And soybean meal traded well for a second day at 590,000 tonnes yesterday. With declining soybean meal stocks, some northern and eastern mills are still limiting the quantity for delivery. In addition, arbitragers are closing positions after the sharp fall in oil futures, and there is still uncertainty in relations between China and the United States. Overall, soybean meal prices still have weak upward potential and may remain range bound in the short term. Participants can wait for new messages, and buyers are suggested to make appropriate replenishment and remain cautious in chasing after high prices. 

Imported rapeseed meal: Imported rapeseed meal steadily fluctuates in price today, of which it settles at 2,140-2,210 yuan/tonne with a fluctuation of 10 yuan/tonne in coastal areas (Guangxi 2,180, stable; Guangdon g 2,140; Fujian 2,160). Recent pork prices fall back continuously, which affects the optimistic market sentiment. And the demand for South aquaculture is gradually entering into an off-season. In addition, Chinese oil mills purchased 14 cargoes of Brazilian soybeans yesterday due to the good crush margins of soybean futures. Thus, rapeseed meal prices are curbed by these factors. However, most factories have no cargoes of rapeseed arriving at ports in the late period due to the tight supply of rapeseed amid tensions between China and Canada, so oil mills are more willing to prop up prices. Therefore, the declines of short-term rapeseed meal are also limited. Buyers can wait for low and stable prices to make replenishment.

Imported fishmeal: Imported fishmeal prices go stable today. It is 8,900-9,300 yuan/tonne for Peruvian Standard SD with 65% protein content, 9,200-9,600 yuan/tonne for Thai SD with 67% protein content, 9,500-10,100 yuan/tonne for Japanese SD with 67% protein content, and 9,900-10,400 yuan/tonne for super SD with 68% protein content. With new-season investigations underway in the centre-north regions, the fishing quota is set at 2.786 mln tonnes, which is relatively high, so domestic traders now have strong sentiment to wait on the sidelines. The aquaculture has been over in north China as the weather gets colder, and the African swine fever is still spreading, which still curbs the demand for feed. But the stable quotation in foreign markets has been a support to domestic spot market. The overall market is predicted to continue the weak trend in the near term. Stocks at port: Huangpu 92,000 tonnes, Fuzhou 32,000 tonnes, Shanghai 47,000 tonnes, Tianjin 1,000 tonnes, Dalian 9,000 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 several declines of 50 yuan/tonne today. The demand is affected by narrowed price gap between soybean meal and cottonseed meal, and some factories have slow pace of delivery. Besides, there is a sign that the ASF will spread again in some regions, and the demand for South aquaculture is entering into an off-season. Moreover, the meals on DCE today edge down with low opens, and spot soybean meal steadily declines by 10-20 yuan/tonne. In short, cottonseed meal market is dragged down by all these factors above. Nevertheless, factories have a strong will to raise price due to high price of cottonseed and low stock of cottonseed meal. Thus, short-term cottonseed meal may follow soybean meal to move sideways with fluctuations. Buyers can make proper replenishment upon low and stable prices.

(USD $1=CNY 7.01)