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Daily Review on Meal Market in China--3/12/2019

2019-12-03 www.cofeed.com
Today (Dec. 3), the market for meals in China is shown as follows:

Soybean meal: As a countermeasure against the Hong Kong-related bill signed by the United States, China suspended the review of requests by U.S. military ships and aircraft to visit Hong Kong and also announced sanctions against several U.S. non-government organizations. US soybean futures fell further last night on fewer export inspection statistics by the USDA and on renewed concerns over trade jitters. Meal futures trade in a tight range on the Dalian Commodity Exchange today. Spot soybean meal prices steadily go down by 10-20 yuan/tonne in tepid trading with some low-level purchases. Specifically, the price settles at 2,820-3,000 yuan/tonne today. (Tianjin 3,000, Shandong 2,990-3,020, Jiangsu 2,880-2,920, Dongguan 2,820-2,830, and Guangxi 2,860-2,880, Fujian 2,900-2,920.) Due to good crush margins on the DCE, soybean arrivals are expected at 9.35 mln tonnes in December and the purchases were nearly 20 cargoes from Brazil last week, so mills are active in raising utilization percentage. In this case, soybean meal stocks increased by 11% to 410,000 tonnes, while aquaculture in southern China has entered into the quiescent period. All these are weighing down meal prices. But mills in Shandong will sharply reduce their operation rates in early December, and soybean and soybean meal stocks have been at relatively low levels in coastal regions. In the meantime, recent rises in hog prices may attract farmers to replenish or stall sales, and buyers will very soon begin to replenish for the New Year’s Day and the Spring Festival. Mills now are propping up prices, helping keep prices from further declines. Short-term prices will mainly keep range bound and choppy, but there will be rises with support from festival demand and trade jitters. Buyers can wait for low and stable prices to make appropriate replenishment. 

Imported rapeseed meal: Imported rapeseed meal rises in price today, of which it settles up 30-40 yuan/tonne at 2,180-2,280 yuan/tonne in coastal areas (Guangxi 2,240; Guangdong not offered; Fujian not offered). There is no cargo of rapeseed arriving at ports in the late period amid tensions between China and Canada. Thus, the supply of rapeseed is expected to still get tightened, and oil mills tend to prop up prices. However, China keeps purchasing South America soybeans under the considerable crush margins of futures. In consequence, the quantity of soybeans arriving at ports in December will reach 9.35 mln tonnes, and oil mills are more willing to improve the processing rate. Besides, the demand from aquaculture in South China is entering into slack season. Therefore, the rises of rapeseed meal prices are curbed by these factors. Buyers are suggested to make proper replenishment on the dips.

Imported fishmeal: Imported fishmeal prices stay stable today with certain negotiation space. Peruvian Standard SD with 65% protein content is 8,900-9,100yuan/tonne; Peruvian higher-quality SD with 65% protein content is 9,200-9,500 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 9,600-9,900 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 9,900-10,200 yuan/tonne. Fish catches are in good shape in Peru so that the market is bearish about high quota. And in China, the demand for fishmeal is hard to improve significantly in the short term, for aquaculture was over in north China with cold winter coming and the African swine fever is still spreading. And traders tend to stay on the sidelines, which is negative to the market. But traders pin their hope on the New Year’s Day, for the replenishment before that may bring some support. Overall, short-term fishmeal market is predicted to keep steady in China. Stocks at port: Huangpu 96,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 42,000 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 factories. Furthermore, spot soybean meal prices today steadily decline 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 can maintain a wait-and-see attitude.

(USD $1=CNY 7.02)