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Daily Review on Meal Market in China--29/11/2019

Today (Nov. 29), the market for meals in China is shown as follows:

Soybean meal: US soybean futures were unavailable as the exchange was shut on Thanksgiving Day yesterday. Meal futures fall after lower opens on the Dalian Commodity Exchange (DCE) today. Spot soybean meal prices decline by 10-20 yuan/tonne in tepid trading. Specifically, the price settles at 2,840-3,040 yuan/tonne today. (Tianjin 3,040, Shandong 3,010-3,040, Jiangsu 2,920-2,940, Dongguan 2,840-2,850, and Guangxi 2,870-2,890, Fujian 2,910-2,930.) Soybean arrivals at ports are expected to reach 9.28 mln tonnes in December under good crush margins on the DCE. In this case, mills are active in picking up operation rates, so soybean crush will go to a relatively high level with weekly crush over 1.80 mln tonnes. And aquaculture has gone into slack season in south China. Soybean meal prices are thus curbed by increasing stocks and tepid demand. Still, both soybean and soybean stocks are at relatively low levels, which may not ease until late December. Millers are propping up prices on account of the increasing number of hog and poultry in breeding and the upcoming peak demand for the New Year’s Day and the Spring Festival, and this helps limit declines in soybean meal prices. Short-term prices will likely keep range bound to adjust. Buyers can wait for low and stable prices to make appropriate replenishment amid uncertainty in trade relations between China and the United States. 

Imported rapeseed meal: Imported rapeseed meal stays stable to inch lower in price today, of which it settles down 10-20 yuan/tonne at 2,130-2,240 yuan/tonne in coastal areas (Guangxi 2,240; Guangdong not offered; Fujian not offered). Due to the profitable crush of oil mills and good crush margins of South America soybeans, Chinese buyers keep purchasing soybeans. Moreover, oil plants would like to improve the operation rate, so the soybean crush could increase to 1.8 mln tonnes for the next two weeks. In addition, the demand from aquaculture in South China has been in an off-season, and rapeseed meal has not traded for two weeks. Thus, rapeseed meal prices are dampened by these factors. As the cottonseed supply is tight amid unclear relations between China and Canada, the operation rate of oil plants continues to lower, which also limits declines of short-term prices.  Meal futures have not stopped falling yet, so buyers can wait for low and stable prices to make appropriate replenishment in batches.

Imported fishmeal: Imported fishmeal prices steadily see a partial rise of 100 yuan/tonne today with certain negotiation space. Peruvian Standard SD with 65% protein content is 8,900-9,100 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 9,200-9,700 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 9,600-10,100 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 10,000-10,200 yuan/tonne. The replenishment in the run up for the New Year’s Day has shored up the fishmeal market by bolstering traders at some ports to raise quotations. But aquaculture has been over in north China as temperature drops gradually, and the African swine fever is still exerting its adverse effect, so the demand will remain weak in the short term. Meanwhile, domestic traders tend to remain on the sidelines after the Peruvian government set the fishing quota above market estimates. 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 10,000 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 fall back with low opens, and spot soybean meal prices today 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. Therefore, the cottonseed meal price will be stable momentarily and mainly fluctuate narrowly in a short term. Buyers could maintain a wait-and-see attitude.

 (USD $1=CNY 7.03)