Today (Dec. 13), the market for meals in China is shown as follows:

Soybean meal: US President Donald Trump signed off on a phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of US tariffs on Chinese imports, according to a report by Bloomberg, and would reduce existing tariffs on $360 billion Chinese commodities by 50% potentially. US soybean futures closed higher last night on renewed hope over a trade deal between the two countries. But meal futures sharply fall on the Dalian Commodity Exchange today as the news is bearish to domestic market. Spot soybean meal prices drop 30-50 yuan/tonne. Specifically, the price settles at 2,740-2,910 yuan/tonne today. (Tianjin 2,910, Shandong 2,915-2,940, Jiangsu 2,800-2,850, Dongguan 2,730-2,750, and Guangxi 2,800-2,810, Fujian 2,850-2,880.) China has purchased about 1.30 mln tonnes of US soybeans under tariff waivers this week. And due to handsome gross crush margins for imported soybeans on the DCE, oil mills are actively signing forward contracts in soybean meal upon negative basis. Besides, there is slack demand from aquaculture in south China entering winter, and investors are buying up on oil futures for huge rises. All these factors are weighing down meal prices. But it will still take some time for soybean meal to ease supply tensions in north China, in addition to rising hog and sow amount and upcoming festival demand, so there is little space for price declines. Buyers are suggested to wait for low and stable prices to make proper replenishment, or to replenish in batches upon negative basis. 

Imported rapeseed meal: Imported rapeseed meal declines in price today, of which it settles down 20-30 yuan/tonne at 2,200-2,300 yuan/tonne in coastal areas (Guangxi 2,300; Guangdong 2,210; Fujian not offered). China keeps purchasing imported soybeans due to the good crush margin of futures. Besides, soybean meal inventory continues to increase as the demand from aquaculture in South China has entered into a slack season; imported mixed meals arrive at ports in huge quantity. Additionally, the African swine fever hits some regions back and forth. Thus, the price rapeseed meal is restrained. But the supply of rapeseed gets tight amid the unclear relations between China and Canada, which limits the price declines of short-term rapeseed meal. Buyers can wait for low and stable prices to make proper replenishment.

Imported fishmeal: Imported fishmeal prices are stable today with certain negotiation space. Peruvian Standard SD with 65% protein content is 8,900-9,200 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 9,200-9,600 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 9,600-10,00 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 10,000-10,300yuan/tonne. The historical high fishing quotas set by the Peruvian government is negative to the market, and the demand for fishmeal remains low due to the African swine fever; hence, fishmeal prices have little upward space. But fish catches are not in good state in Peru, and domestic market may be underpinned by festival demand with New Year’s Day and the Lunar New Year around the corner. Overall, fishmeal market is predicted to keep steady with a strengthening trend in the near term. Stocks at port: Huangpu 98,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 41,000 tonnes, Tianjin 1,000 tonnes, Dalian 11,000 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 price stays stable with some fluctuations of 20-50 yuan/tonne today. The market of cottonseed meal is supported by pricey cottonseed and the halt of operation in some regions. However, the rises of meals prices are also depressed by poor demand affected by narrow price spread between soybean meal and cottonseed meal, lack of rigid demand under a slack season of aquaculture in South China. In addition, Bloomberg reported that President Donald Trump approved the phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on consumer goods from China, and it was expected to reduce tariff rates by at most 50% on existing $360 billion of Chinese products. Accordingly, the tensions between U.S. and China have eased, which is bearish for domestic meals prices. Thus, meals on DCE today fall back obviously, and spot soybean meal slips by 30-50 yuan/tonne. In consequence, all these factors are negative for cottonseed meal prices. It is expected that short-term cottonseed meal may fluctuate at a narrow range. If traders stock up cottonseed meal before Spring Festival, it may be hopeful to rally mildly. Soybean meal has yet to stop declining, which may weigh down cottonseed meal. Buyers can wait and see.