Today is 05/07/2021

Daily Review on Meal Market in China--5/18/2020

Today (May18), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures closed higher last Friday, and meal futures bounce on the Dalian Commodity Exchange today. Soybean meal spot prices steadily fluctuate by 5-45 CNY/tonne in tepid trading and settle at 2630-2750 CNY/tonne today. (Tianjin 2750, Shandong 2665-2700, Jiangsu 2635-2680, Dongguan 2630-2660, and Guangxi 2650-2700.) U.S. soybean futures rebounded on improving export sales. The United States last Friday unveiled a rule to stop global manufacturers from sales to Huawei of semiconductors made with U.S. technology, which triggers concerns that China may make retaliatory sanctions against US companies like Apple, Qualcomm and Boeing. Hence, meal futures bounce and expand gains on uncertainties in relations between China and the U.S. and on technical corrections after consecutive declines. Spot soybean meal prices may be bolstered to fluctuate to moderately rebound. However, China’s monthly soybean imports are forecast to get near to 10 mln tonnes from May to July. Meanwhile, soybean and soybean meal stocks keep increasing in oil mills. Soybean crush moved to a very high level of 1.91 mln tonnes last week and may hit 2 mln tonnes this week. Besides, breeding industry is not active as the pandemic has severely punched the catering services. Overall, soybean meal prices may rebound technically in the short term, but will probably fluctuate with a weakening trend unless weather conditions turn extremely unfavorable to soybean in US crop belt. Buyers out of stock can make appropriate replenishment on the dips and remain cautious in chasing after high prices. 

Imported rapeseed meal: Imported rapeseed meal goes up in price today, of which it settles up 10-30 CNY/tonne at 2,260-2,330 CNY/tonne in coastal areas (Guangxi not available; Guangdong 2,310, up 20; Fujian 2,340, up 30). The tensions between China and Canada have yet to be eased, the relations between China and Australia become strained as well, which may affect later import of Australian rapeseed. And rapeseed crush remains low. Moreover, the aquaculture has entered into a peak season, boosting rapeseed meal market to rebound. But rapeseed meal stocks in coastal regions reached 14,500 tonnes last week, increased by 52% from a week earlier. Furthermore, there are quantities of imported soybeans arriving at ports from May to July. Based on this, oil plants gradually promote the operation rate, causing a consecutive rally in soybean meal stocks. Last week. Soybean crush rose by 9% to 1.91 mln tonnes. On the other hand, the widespread of coronavirus pandemic has impacted demand for meats directly. With the price of animal products trending down, downstream enterprises are still wary of taking the purchase. As the upward momentum of rapeseed meal is still limited in the near term, the price may follows futures to fluctuate at a narrow range on the whole. Buyers can make small replenishment upon low price and remain cautious in chasing up price.

Imported fishmeal: Imported fishmeal prices are declining today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,800-12,100 CNY/tonne, down 200-300 CNY/tonne from last Friday; Peruvian higher-quality SD with 65% protein content is 12,200-12,400 CNY/tonne, down 200-300 CNY/tonne from last Friday; Peruvian higher-quality SD with 67% protein content is 12,700-12,900 CNY/tonne, down 400-500 CNY/tonne from last Friday; and Peruvian Super Prime SD with 68% protein content is 13,500-13,900 CNY/tonne, down 200-500 CNY/tonne from last Friday. The market is still affected by a neutral-level fishing quotas of 2.413 mln tonnes in centre-north oceans in Peru. And imported super prime SD fishmeal prices still stay high, so that downstream buyers are reluctant to make purchases. The market is thus cracked down by thin trading. However, a high proportion of juvenile fishes has led to a five-day fishing ban just at the very start of the new season in Peru, and the country is still in the state of emergency due to the coronavirus pandemic, casting doubts about fishing activities in the new season. Traders in China tend to prop up prices, which helps support the market. Overall, fishmeal market is predicted to stay stable with a weakening trend in the short term. Stocks at port: Huangpu 54,000 tonnes, Fuzhou 22,000 tonnes, Shanghai 36,000 tonnes, Tianjin 1,000 tonnes, Dalian 11,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB quotes from foreign markets today: It is quoted higher by 30 USD at 1,530 USD/tonne for Peruvian Standard with 65% protein content and also higher by 30 USD at 1,760 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted steadily at 1,470-1,520 USD/tonne, and super with 68% protein content steadily at 1,720-1,750 USD/tonne. 

Cottonseed meal: Cottonseed meal prices keep steady with partial declines of 20-70 CNY/tonne today. There are nearly 10 mln tonnes of soybeans arriving at ports each month from May to July. In this case, the inventories of soybean and soybean meal keep rising in crushing mills. And soybean crush rapidly grew to a super high of 1.91 mln tonnes last week and would likely reach 2 mln tonnes this week. Besides, catering services have been hammered by the coronavirus pandemic worldwide, which is unfavorable for breeding industry. With these bearish factors depressing cottonseed meal market, the trading goes not well and the price declines in some regions. However, cottonseed is pricey due to supply shortages, so cottonseed meal price remains high supported by the cost. And oil mills in Xinjiang have no pressure from inventory, which bolsters cottonseed meal market tentatively. It is predicted that short-term cottonseed meal price may continue to adjust with fluctuations.

(USD $1=CNY ¥7.1)