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Daily Review on Meal Market in China--11/3/2020

2020-03-11 www.cofeed.com
Today (Mar. 11), the market for meals in China is shown as follows:

Soybean meal: US soybean futures closed with gains last night (Tuesday), and meal futures continue to rise moderately on the Dalian Commodity Exchange today. Soybean meal spot prices steadily fluctuate by 10-20 yuan/tonne. Specifically, the price settles at 2780-2880 yuan/tonne today. (Tianjin 2880, Shandong 2835-2840, Jiangsu 2780-2800, Dongguan 2780-2790, and Guangxi 2790-2830.) As soybean imports are relatively low this month, some oil mills have suspended production and soybean crush also declines a lot. Mills have low soybean meal stockpiles and are completing delivery of old contracts after selling out spot goods. Meanwhile, the demand for soybean meal is getting better, because farmers are replenishing hog stocks for considerable breeding margins and over 80% of feed enterprises have resumed work. And mills are propping up meal prices due to low oil prices, which helps support meal market. However, due to generous crush margins on the DCE, China bought 40 cargoes of Brazilian soybeans last week. Soybean imports are estimated at 7.50, 8.30 and 8.70 mln tonnes in April, June and July respectively, according to preliminary data by Cofeed. And under the spread of the virus across the globe, the decline in demand for meat products will also affect the breeding. Feed enterprises forecast that the decline in demand for poultry feed could reach 20-30% in March. Therefore, the gloomy prospect in demand may limit the upward space. Overall, short-term soybean meal market is predicted to keep range-bound with a strengthening trend. DCE meal futures move lower after opening high today, so buyers are suggested not to chase after excessively high prices. 

Imported rapeseed meal: Imported rapeseed meal price rises today, of which it settles up 10-20 yuan/tonne at 2,230-2,320 yuan/tonne in coastal areas (Guangxi 2,280; Guangdong not offered; Fujian 2,280, up 10). Rapeseed is in short supply amid unclear relations between China and Canada, so the operation rate in oils mills is low and soybean meal inventories stay at a low level. Due to lower arrivals of boatloads of soybean in March, some enterprises have a plan of halting the operation. Meanwhile, soybean meal spots have been sold out basically, so factories mainly implement the contract. Besides, more than 80% feed enterprises have returned to work, so the demand picks up, which boosts meals prices. However, Chinese buyers purchased Brazilian soybeans last week due to the good crush margins. And soybean arrivals will be likely as high as 24.5 mln tonnes from April to June. Also, the imports for U.S. agricultural products will also increase in later period. Otherwise, a decrease of demand for meats on account of the spread of the novel coronavirus epidemic worldwide has also affected breeding industry. Accordingly, rapeseed meal prices are weak in going up and the futures pare gains in afternoon trading. In a short term, rapeseed meal price may fluctuate at a narrow range. Buyers had better not chase up price too far.

Imported fishmeal: Imported fishmeal prices are stable with a partial rise of 100-200 yuan today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,500-12,000 yuan/tonne; Peruvian higher-quality SD with 65% protein content is 11,800-12,300 yuan/tonne; Peruvian higher-quality SD with 67% protein content is 12,300-12,900 yuan/tonne; and Peruvian Super Prime SD with 68% protein content is 12,800-13,100 yuan/tonne. Peru’s Ministry of Production has initiated an investigation into its marine resources, and insiders expect the country will set its new-season quota at around 1.0-1.5 mln tonnes, which is relatively low. And in China, traders are of different moods with some of them trying to prop up prices as most fishmeal stocks are held at main ports. However, the consumption of fishmeal remains slack at present, so feed enterprises tend to take hand-to-mouth buying. In addition to dismal demand, fresh goods are arriving at ports, sending port stocks mounting higher gradually, so that traders are under selling pressure. In conclusion, fishmeal market is predicted to keep steady with a strengthening trend in the near term. Stocks at port: Huangpu 63,000 tonnes, Fuzhou 31,000 tonnes, Shanghai 37,000 tonnes, Tianjin 1,000 tonnes, Dalian 14,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB quotes from foreign merchants today: It is quoted steadily at 1,450 USD/tonne for Peruvian Standard with 65% protein content and 1,750 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted steadily at 1,420 USD/tonne, and super with 68% protein content at 1,720 USD/tonne.

Cottonseed meal: Cottonseed meal prices are stable with individual further declines of 20 yuan/tonne. The price spread between soybean meal and cottonseed meal is narrow. Besides, the novel coronavirus epidemic is spreading around the world, lowering demand for meats and affecting breeding industry. Likewise, the demand from aquaculture has been in an off season, and factories have not many new orders of cottonseed meal. Consequently, cottonseed meal prices are dampened by these factors. However, some inland oil mills halt the production as they run out of cottonseed, which leads manufacturers to prop up meals price. Additionally, meals on DCE moderately rise today, and soybean meal spot steadily up by 10-20 yuan/tonne. Therefore, the price declines of cottonseed meal are limited, and it is expected that short-term cottonseed meal prices may fluctuate weakly.

(USD $1=CNY¥6.96)