Today is 05/08/2021

Daily Review on Meal Market in China--5/21/2020

Today (May 21), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures closed higher on Wednesday as China would turn its purchases to the US market after the Brazilian currency gained against the U.S. dollar. Meal futures swing fractionally on the Dalian Commodity Exchange today. Soybean meal spot prices steadily fluctuate by 10-20 CNY/tonne with some low-level purchases, and settle at 2610-2730 CNY/tonne today. (Tianjin 2730, Shandong 2675-2700, Jiangsu 2650-2700, Dongguan 2610-2620, and Guangxi 2610-2630.) China’s soybean crush is on a sharp rise with huge soybean arrivals at ports now. The demand from the breeding industry fails to meet the forecast as the pandemic is still depressing the catering services. Weekly soybean meal stocks have increased by 20% to 370,000 tonnes, especially in Guangdong and Guangxi, where some mills have quickened up deliveries. Fundamentals are bearish now. There is no any breaking news from US crop weather or Brazil’s port shipments. Given this, soybean meal market will probably fluctuate with a weak trend on the whole. Buyers are suggested to remain cautious, make appropriate replenishment on the dips, and not to chases after excessively high prices.

Imported rapeseed meal: Imported rapeseed meal price remains flat today, of which it settles at 10-20 CNY/tonne at 2,220-2,330 CNY/tonne in coastal areas (Guangxi 2,260, flat; Guangdong 2,300, flat; Fujian 2,320, flat). With monthly arrival of nearly 10 mln tonnes of soybeans from May to July, it is under the pressure from huge imports. In this case, soybean crush may reach around 2 mln tonnes in the coming two weeks, leading to a consecutive rise in soybean meal stocks. And soybean meal stocks increase by 20% to 370,000 tonnes. However, the widespread of coronavirus pandemic has hammered global food services, which causes slow recovery of demand in farming industry. Thus, rapeseed meal price is dragged down by these factors. Likewise, the tensions between China and Canada have yet to be eased, the relations between China and Australia become strained as well. And rapeseed crush remains low, which is favorable to limit price declines of rapeseed meal. Therefore, short-term rapeseed meal market is projected to fluctuate at a narrow range. Buyers can make small replenishment on the dips but remain cautious in chasing up price.

Imported fishmeal: Imported fishmeal prices are stable with some declines today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,500-11,800 CNY/tonne, down 500 CNY/tonne from yesterday; Peruvian higher-quality SD with 65% protein content is 11,800-12,200 CNY/tonne, down 300 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 12,700-12,800 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,600-13,800 CNY/tonne, down 100 CNY/tonne. Domestic fishmeal has already been at high prices at present, so feed mills are cautious in purchasing under dismal demand. The market is in thin trading, so that some traders have slightly lowered down quotes to attract some deals. This in turn weighs down the market. However, Peru is in the dry season now when fishing vessels have to sail on the rough seas, in addition to the influence of the coronavirus pandemic, so there are uncertainties in new fishing season. China’s fishmeal market is surrounded with a strong wait-and-see sentiment now. Overall, short-term fishmeal market is predicted to steady with slight adjustments. Stocks at port: Huangpu 54,000 tonnes, Fuzhou 21,000 tonnes, Shanghai 36,000 tonnes, Tianjin 1,000 tonnes, Dalian 10,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. FOB quotes from foreign markets today: It is quoted lower by 50 USD at 1,450 USD/tonne for Peruvian Standard with 65% protein content and also lower by 50 USD at 1,680 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted steadily at 1,490 USD/tonne, and super with 68% protein content at 1,720 USD/tonne. 

Cottonseed meal: Cottonseed meal prices keep steady with partial rises of 20-30 CNY/tonne today. The high cost, together with low operation rate, lead to some rises of cottonseed meal in some regions. But there are nearly 10 mln tonnes of soybeans arriving at ports each month from May to July. In this case, soybean crush will likely be as high as 2 mln tonnes. And soybean meal stocks increased by 20% to 370,000 tonnes last weekend. Besides, catering services have been hammered by the coronavirus pandemic worldwide, so the demand in farming recovers slowly. With these bearish factors depressing cottonseed meal market, the delivery in factories slows down. It is predicted that short-term cottonseed meal price may continue to adjust with fluctuations. Buyers can buy on immediate demand.

(USD $1=CNY ¥7.09)