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Daily Review on Meal Market in China--19/1/2020

2020-01-19 www.cofeed.com
Today (Jan. 19), the market for meals in China is shown as follows:

Soybean meal: US soybean futures rose on Friday night following sharp gains in corn futures, but meal futures edged lower in after-hours trading on the Dalian Commodity Exchange on Friday. The DCE is closed on Sunday today. Soybean meal spot prices are mostly stable with a partial decline of 5-10 yuan/tonne with light trading ahead of the Lunar New Year. Specifically, the price settles at 2620-2770yuan/tonne today. (Tianjin 2770, Shandong 2670-2680, Jiangsu 2640-2680, Dongguan 2620-2640, and Guangxi2640-2650.) Soybean crush still stays above 2 million in the week as of January 17 due to good margins. Under the trade deal signed on Wednesday, China will certainly boost imports of soybeans, pork and poultry meat from the US. And the market of DDGS, one alternative meal of soybean meal, may also get opened again. On the demand front, aquaculture has been slack in winter, and hog stocks will not recover until the middle to later period of the second quarter this year; hence, soybean meal will have faltering demand after the festival and feed enterprises do not make bulk purchases now for a lack of confidence in the market. In the absence of higher demand, soybean meal market will not get improved very much and may keep range-bound. Buyers can wait at the moment or keep light stockpiles.

Imported rapeseed meal: Imported rapeseed meal prices are stopped to quote today (Guangxi not offered; Guangdong not offered; Fujian not offered). On Friday night, U.S. soybeans closed higher, and rapeseed meal futures on Zhengzhou Commodity Exchange fluctuated and rose slightly in after-hours trading. However, domestic meal futures close today, and rapeseed meal prices are unquoted on the spot market. In addition, factories are generally short of rapeseed to crush amid unclear relations between China and Canada. Last week, rapeseed meal inventory in coastal areas decreased by 33% to 11,000 tonnes from the previous week, so oil mills raised the prices. But the imports for DDGS are likely to be reopened after China signing phase one trade deal with US. Besides, the soybean crush still stays at an extremely high level of 2 mln tonnes this week thanks to the good crush margin. But with demand from aquaculture entering into an off season, soybean meal prices are softer, which limits the price rises of rapeseed meal. Therefore, short-term market is expected to fluctuate narrowly. And buyers can just hold appropriate inventory but not chase up prices too excessively.

Imported fishmeal: Imported fishmeal prices steady today with some negotiation space. Peruvian Standard SD with 65% protein content is 11,800-12,000 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 12,100-12,300 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 12,600-12,800 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 13,000-13,100 yuan/tonne. Traders are getting off the market and logistics companies are closed with the coming of the Lunar New Year, so fishmeal market at port can hardly have bulk purchases. The market is quiet now in spite of high prices. But traders are also waiting for higher prices as the market sentiment is affected by the end of fish catches in Peru. Overall, fishmeal prices will keep stable before the festival, but may continue to go upward after the festival. Stocks at port: Huangpu 61,000 tonnes, Fuzhou 31,000 tonnes, Shanghai 31,000 tonnes, Tianjin 1,000 tonnes, Dalian 3,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB prices from foreign merchants today: it is all quoted steadily at 1,480 USD/tonne for Peruvian Standard with 65% protein content and 1,780 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is unchanged at 1,300 USD/tonne, and super with 68% protein content at 1,610 USD/tonne.

Cottonseed meal: Cottonseed meal prices partially stay stable and partially are stopped to quote today. The purchasing price of cottonseed is high in earlier stage, and there are many enterprises that have halted the operation amid stronger festive air. Thus, the cottonseed meal market is supported. But cottonseed meal is also dragged down by the inversion of price spread between soybean meal and cottonseed meal. And due to closed market in the weekend, most spot soybean meals are stable and some down by 5-10 yuan/tonne. Additionally, both buying and selling are tepid in the market, so cottonseed meal market is likely to see a little fluctuation and mainly keep steady before Spring Festival.

(USD $1=CNY 6.89)