Today is 03/29/2024

Daily Review on Meal Market in China--5/2/2020

2020-02-05 www.cofeed.com
Today (Feb. 5), the market for meals in China is shown as follows:

Soybean meal: US soybean futures extended gains last night following a huge rise in the stock market and as soybean harvests might be delayed by rains in some parts of Brazil. Meal futures stay below the previous close on the Dalian Commodity Exchange today, in spite of some gains. Soybean meal spot prices steadily go up by 10-20 yuan/tonne to see some low-level purchases, but the trading is less than yesterday. Specifically, the price settles at 2630-2810 yuan/tonne today. (Tianjin 2810, Shandong 2710-2780, Jiangsu 2690-2700, Dongguan 2630-2640, and Guangxi 2680-2700.) The majority of mills have postponed the production under the epidemic situation, and mills in East China have to wait for the notice of local governments who have taken strict step in management and control. Soybean meal faces tight supply in some regions and go out of supply in eastern areas. Moreover, mid-to-downstream buyers, who were very cautious before the holidays, just made small replenishment, so that they are now rushing to make purchases. As a result, soybean meal prices rebound, bolstered by active trading in the market. However, local governments have banned the trading of live poultry in consideration of the coronavirus, and the demand for meat products is also affected as the catering industry is hit heavily by the epidemic. Besides, hog stocks may recover at a slower pace than expected previously. Therefore, the rise in soybean meal price will be constrained by limited demand. On the whole, the price will keep strengthening before logistics and mills resume to their normal state. Chinese importers have bought about 8 cargoes of soybeans from Brazil in the past two days as the crush margins stay high at 250-320 yuan/tonne on the DCE, but the demand for soybean meal is in a gloomy prospect, so there is a lack of support for rises in soybean meal price. Buyers are suggested to make appropriate replenishment on the dips and not to chase after excessively high prices. 

Imported rapeseed meal: Imported rapeseed meal prices stay stable with slight rises today, of which it settles at 2,170-2,220 yuan/tonne in coastal areas and partially increases by 10 yuan/tonne (Guangxi 2,170, flat; Guangdong 2,230; Fujian 2,200, flat). The rapeseed is in short supply amid continuous tensions between China and Canada, so the inventory of rapeseed meal stays at a low level and oil mills prop up prices. But the crush margin of soybean futures is good, and China has bought 8 boatloads of Brazilian soybean over the last two days. In addition, local governments forbid the live poultry trading due to the spread of epidemic, and Hunan outbreak the avian influenza. Meanwhile, the demand for meats is also affected by the huge hurt in catering industry owing to the epidemic. Even more, the demand from aquaculture is in an off season, which is unfavorable for the improvement in demand for meal products. Therefore, the upward space of rapeseed meal price is limited. It is predicted that the overall price still be in a weak trend before a detente in the epidemic. Buyers can make proper replenishment on the dips but not chase up prices too high.

Imported fishmeal: Imported fishmeal prices are stable today with certain 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. Subject to the spread of the novel coronavirus, China has extended the Lunar New Year holidays, so that many traders have not resumed work. There is no prevailing prices available in the fishmeal market, and the trading is quite lukewarm under slow logistics. But traders are also waiting for higher prices as the market sentiment is affected by the end of fish catches in centre-north regions of Peru. Overall, fishmeal prices will probably keep stable in the near term. The prevailing price is expected to be available after Feb 10. Stocks at port: Huangpu 58,000 tonnes, Fuzhou 30,000 tonnes, Shanghai 30,000 tonnes, Tianjin 1,000 tonnes, Dalian 9,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB prices from foreign merchants today: It is quoted steadily at 1,430 USD/tonne for Peruvian Standard with 65% protein content and 1,730 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is unchanged at 1,250 USD/tonne, and super with 68% protein content at 1,560 USD/tonne.

Cottonseed meal: Cottonseed meal prices are mostly not offered today and individual prices are up 20 yuan/tonne. Since only few enterprises start the operation over the pneumonia epidemic, the supply of cottonseed meal is very limited. Besides, meals on DCE continue to rise today and steadily up by 10-20 yuan/tonne on the spot market. Therefore, cottonseed meal market is bolstered by these factors. But the price spread between soybean meal and cottonseed meal sees an inversion. And catering industry is also under a great impact due to the epidemic, affecting demand for meats. Beyond that, a significant recovery of hog stocks may not be too soon, and the avian influenza occurred in Hunan also goes against the improvement in demand for cottonseed meal. Accordingly, these are bearish for cottonseed meal market. With the crush of cottonseed operating successively in the later period, cottonseed meal price is likely to have a contingent risk of moderate falls.

(USD $1=CNY 6.98)