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Daily Review on Meal Market in China--13/1/2020

2020-01-13 www.cofeed.com
Today (Jan. 13), the market for meals in China is shown as follows:

Soybean meal: US soybean futures closed with gains last Friday as China and the US were to sign the trade deal. But meal futures extend losses on poor demand on the Dalian Commodity Exchange today. Soybean meal spots drop by 20-50yuan/tonne in tepid trading. Specifically, the price settles at 2,620-2,770 yuan/tonne today. (Tianjin 2770, Shandong 2665-2700, Jiangsu 2630-2670, Dongguan 2620-2630, and Guangxi 2620-2660.) With huge soybean imports arriving at ports and good crush margins, soybean crush is kept at a high level of 2 million tonnes per week recently. In the meantime, aquaculture has been slack entering into winter, and with high slaughtering rates in run up for the Spring Festival, hog breeding will then go slack; hence, the demand for soybean meal will fall accordingly. Feed enterprises just make small replenishment this year for the festival for a lack of confidence in the market. As a result, soybean meal stocks keep rising, with some mills in Guangdong and Guangxi even suspending crush bothered by swelling stocks. It still takes some time for hog production to resume significantly, and it is highly possible that South American countries will harvest abundant soybean crop with favorable weather. Besides, China and the US are to sign the deal soon. Therefore, the overall meal market may maintain its weak pattern. Buyers can wait at the moment. 

Imported rapeseed meal: Imported rapeseed meal declines in price today, of which it settles down 10-20 yuan/tonne at 2,180-2,320 yuan/tonne in coastal areas (Guangxi 2,180; Guangdong 2,190; Fujian 2,190). With huge imports of imported soybean arriving at ports and crush margins going better in recent two months, soybean crush remains extremely high. Furthermore, the demand from aquaculture has entered into an off season, leading additional increase of inventory of soybean meal. In addition, the imports for DDGS may be opened after the signing of U.S.-China phase one trade deal, which will greatly hit rapeseed meal market. Thus, rapeseed meal prices are curbed by these factors. On the other hand, Canadian prosecutors said Friday that Meng Wanzhou should had been accused to fraud rather than breaking U.S. sanctions law against Iran. In consequence, mills are short of rapeseed to squeeze amid unclear relations between China and Canada, which also limits the price declines of short-term rapeseed meal. Among that, rapeseed meal inventory in coastal areas dropped to 16,500 tonnes last week, a decline of 29% than previous week. As the declining price still has yet to keep steady, buyers can wait and see.

Imported fishmeal: Imported fishmeal prices steady with a partial rise of 200-300 yuan today. Peruvian Standard SD with 65% protein content is 10,700-10,900 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 11,000-11,300 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 11,600-11,800 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 11,800-12,100 yuan/tonne. The Peruvian government has released another 5-day fishing ban, and according to insiders, Peru will have tight fishmeal supply later. Therefore, traders, who have already been with little supply, are bolstered to stall sales to hike prices. But the demand for fishmeal is poor at present, which may limit its upward space. Overall, the market is predicted to have some upward potential in the short term. Stocks at port: Huangpu 80,000 tonnes, Fuzhou 32,000 tonnes, Shanghai 34,000 tonnes, Tianjin 1,000 tonnes, Dalian 5,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB prices from foreign merchants today: it is quoted steadily at 1,380 USD/tonne for Peruvian Standard with 65% protein content and 1,680 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is unchanged at 1,200 USD/tonne, and super with 68% protein content at 1,510 USD/tonne.

Cottonseed meal: Cottonseed meal price stays stable with some declines of 20-50 yuan/tonne today. The poor demand is affected by narrow price spread between soybean meal and rapeseed meal, and downstream enterprises are not active in stocking up goods. In addition, meals on DCE today drop further, and spot soybean meal down by 20-50 yuan/tonne. Accordingly, cottonseed meal price is depressed by these factors. But the price of cottonseed is high, and the operation rate has a downside with New Year approaching. Therefore, the price declines of cottonseed meal are limited, and short-term market is predicted to fluctuate weakly. Buyers can maintain a wait-and-see attitude.

(USD $1=CNY 6.93)