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Daily Review on Meal Market in China--26/12/2019

2019-12-26 www.cofeed.com
Today (Dec. 26), the market for meals in China is shown as follows:

Soybean meal: US stock market was closed on Christmas last night, and meal futures edge lower on the Dalian Commodity Exchange today. Soybean meal spot price steadily drops by 10-20 yuan/tonne. Specifically, the price settles at 2670-2820 yuan/tonne today. (Tianjin 2820, Shandong 2780-2820, Jiangsu 2720-2750, Dongguan 2670-2700, and Guangxi 2710-2740, Fujian 2800-2820.) Favourable crop weather could boost soybean production in Argentina and Brazil, and soybean arrivals at ports are huge in China this month. Meanwhile, Chinese mills have been raising soybean crush, probably to an extremely high level of 1.90 mln tonnes both the next two week, and soybean meal stocks have thus snapped the decline to rise. Moreover, there are also huge quantities of alternative meals arriving at southern ports, which has dragged down meal prices in Guangdong and Guangxi to the lowest level nationwide and thus impacted domestic soybean meal market. However, local governments are working hard to support hog production because the slaughtering rate is linked up with their performance examination in main production provinces, in addition to huge margins in breeding, so crossbred finishing pigs now are kept for breeding and sows stocks are also recovering at a faster pace. The market is expected a sharp increase in hog stocks after May 2020. And due to growing import cost due to rising US soybean prices, the crush is no more profitable for near-month contracts on the DCE. Therefore, there may be limited space for further declines in soybean meal prices. Soybean meal prices have weak upward potential now due to a delay in feed replenishment for the festival and will fluctuate to decline slightly in the short term.

Imported rapeseed meal: Today, imported rapeseed meal price edges down, of which it settles down 10 yuan/tonne at 2,160-2,300 yuan/tonne in coastal areas (Guangxi 2,250; Guangdong 2,180; Fujian not offered). A large quantity of soybean arrives at ports this month, and soybean crush rallies to a super high level. Moreover, imported mixed meals arrive at ports intensively, and imported sunflower meal arrives at Guangdong port in large quantity particularly. Besides, the inventory of soybean meal and rapeseed meal also rebounded last week due to the slack season of aquaculture in South China and recurrence of African swine fever in some regions. Therefore, rapeseed meal price is curbed by these factors. However, the supply of rapeseed is tight amid unclear relations between China and Canada, resulting in a lower level of operation rate. And oil mills prop up prices, which will still limit the price declines of short-term rapeseed meal. Buyers can wait and see.

Imported fishmeal: Imported fishmeal prices keep steady today with certain negotiation space. Peruvian Standard SD with 65% protein content is 9,800-10,000 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 10,200-10,400yuan/tonne; Peruvian higher-quality SD with 67% protein content is 10,700-10,900 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 11,000-11,200 yuan/tonne. Peruvian Production Department has released a 10-day ban on fish catches under the urge of fishermen to protect juvenile fish resources, and a rumor said that the fishing will not start again until January 2, 2020. Fish catch is forecast to have a gloomy outlook, so domestic traders are bolstered to raise fishmeal prices. But there is still limited upward space for fishmeal prices due to slack demand and slow shipment. Overall, fishmeal market is predicted to have some upward potential in the short term. Stocks at port: Huangpu 97,000 tonnes, Fuzhou 33,000 tonnes, Shanghai 37,000 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 1,280 USD/tonne for Peruvian Standard with 65% protein content and 1,580 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is unchanged at 1,100 USD/tonne, and super with 68% protein content at 1,410 USD/tonne.

Cottonseed meal: Cottonseed meal price stays stable and individually declines by 30 yuan/tonne today. The price gap between soybean meal and cottonseed meal is narrow, limiting the demand. And feed factories delay the restocking ahead of the holiday, so the trading volume of some manufacturers is dull. Besides, meals on DCE today dip lower, and spot soybean meal down by 10-20 yuan/tonne. Thus, cottonseed meal market is dragged down by these factors. But some oil mills stop operation due to the inspection for environmental protection, and the cost of cottonseed is high. These two factors both limit the downward space of cottonseed meal price. And short-term market is predicted to fluctuate weakly at a narrow range. Buyers can take a wait-and-see attitude.

(USD $1=CNY 6.98)