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Daily Review on Meal Market in China--28/11/2019

Today (Nov. 28), the market for meals in China is shown as follows:

Soybean meal: US soybean futures closed with losses on Wednesday, as improving crop weather weighed on prices by bolstering soybean production prospects for Brazil and Argentina. Meal futures fluctuate to move slightly lower on the Dalian Commodity Exchange today. Spot soybean meal prices steadily decline by 10-20 yuan/tonne in tepid trading. Specifically, the price settles at 2,860-3,060 yuan/tonne today. (Tianjin 3,060, Shandong 3,020-3,050, Jiangsu 2,920-2,950, Dongguan 2,860-2,880, and Guangxi 2,890-2,900, Fujian 2,920-2,930.) While soybean crush will be raised to a high level in coming few weeks due to handsome crush margins, soybean meal stocks are also increasing with tepid demand now that aquaculture has gone into the off-season in south China. Still, stocks for both soybean and soybean meal are at low levels. Meanwhile, the amount of hog and egg-laying poultry is picking up, and the peak season for replenishment in the run up for the New Year’s Day and the Spring Festival is about to come. Mills are propping up prices, which helps limited further declines. Short-term soybean meal prices will mostly keep range bound. The United States signed Hong Kong Human Rights and Democracy Act into law, and Chinese government said it strongly opposes the legislation and will retaliate. Participants can keep an eye on the influence and buyers can wait for low and stable prices to make appropriate replenishment. 

Imported rapeseed meal: Imported rapeseed meal stays stable with a slight rise in price today, of which it settles up partially 20 yuan/tonne at 2,150-2,250 yuan/tonne in coastal areas (Guangxi 2,240, up 20; Guangdong not offered; Fujian not offered). Due to the tight supply of rapeseed and recent low operation rate, oil mills put up prices. But Chinese crushers continue purchasing South America soybeans, which is attracted by the good crush margins of soybean futures. In addition, the demand from aquaculture is gradually entering into a slack season, limiting the rapeseed meal prices. Thus, rapeseed meal prices are still weak in the rises and may fluctuate at a narrow range in a short term. Buyers are suggested to maintain safety inventory on the dips and not to chase up prices too high.

Imported fishmeal: Imported fishmeal prices are stable with certain negotiation space today. Peruvian Standard SD with 65% protein content is 8,800-9,000 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 9,100-9,600 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 9,500-10,100 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 9,900-10,200 yuan/tonne. Due to reducing fish catches in Peru, fishmeal prices stay strong in foreign market, which provides support for spot market in China. In addition, Chinese buyers are stocking up for the New Year’s Day. But the aquaculture in north China is over as the weather gets colder, and the demand from hog herd is also weak due to the influence of the African swine fever. Meanwhile, the fishing quota released by the Peruvian government is higher than the market estimates, so Chinese traders hold strong sentiment for staying on the sidelines. Overall, short-term fishmeal market is predicted to keep steady in China. Stocks at port: Huangpu 94,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 43,000 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 1,130 USD/tonne for Peruvian Standard with 65% protein content and 1,380 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is 1,100 USD/tonne, and super with 68% protein content at 1,360 USD/tonne.

Cottonseed meal: Cottonseed meal stays stable today. The cottonseed meal market is weighed down by poor demand under narrow price gap between soybean meal and cottonseed meal, off-season period of demand from aquaculture, as well as little shipment of cottonseed meal in some factories. Furthermore, meals on DCE today edge down with fluctuations, and spot soybean meal prices today steadily slip by 10-20 yuan/tonne. But cottonseed is pricey, which strengthens the willingness of oil mills to prop up cottonseed meal prices under the support of cost. And factories’ quotation is stable currently. Therefore, the cottonseed meal price will mainly fluctuate narrowly in a short term. Buyers could maintain wait-and-see attitudes.

(USD $1=CNY 7.03)