Daily Review on Meal Market in China--22/1/2020
Today (Jan. 22), the market for meals in China is shown as follows:
Soybean meal: US soybean futures fell to a five-week low last night on no fresh sales to China and a good harvest in sight in Brazil. Soybean meal futures also decline on the Dalian Commodity Exchange today. Prices are unavailable as most distributors have been on their way home for the Chinese Lunar New Year. Soybean meal prices offered today: Beijing down 20 to 2750 yuan/tonne, Guangdong up 20 to 2670 and Nantong distributor 2630-2635 yuan/tonne. The coronavirus pneumonia first founded in Wuhan is a rise in cases in China, and governments in Henan, Wuhan, Anhui and some other provinces and cities have all released sales prohibition on live poultry. This has triggered concerns in the market, so that the stock markets broadly fall today. The catering industry is predicted to get impacted, and thus cutting the demand for meat products. Besides, aquaculture has been slack in winter and hog stocks will not recover until the second quarter this year; hence, soybean meal will have lower demand after the festival. Meanwhile, soybean and DDGS imports from the US will likely continue to boost. The mass movement of people during the festival travel rush adds to the difficulty of prevention and control of the new pneumonia. Therefore, meal prices are in an uncertain state, and buyers can wait at the moment.
Imported fishmeal & rapeseed meal: Prices are not offered today, as most traders have been leaving the market for Lunar New Year holidays.
Cottonseed meal: Cottonseed meal prices are mostly unquoted and several keep steady 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. Moreover, downstream enterprises have almost discontinued the purchase. 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. The novel coronavirus pneumonia continues to spread and cases increase rapidly. Besides, the sales of live poultry have been banned entirely in Henan, Wuhan, Anhui and other provinces and cities, triggering concerns in the market. In consequence, stock market falls on the news. And the catering will be affected, thereby reducing demand for meat. It will be also negative for meal products if the virus continues to spread. Participants should take note.
(USD $1=CNY 6.89)
