Today (May 25), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures fell last Friday on renewed tensions between Beijing and Washington. But meal futures expand their early gains on the Dalian Commodity Exchange today. Soybean meal spot prices go up by 20-40 CNY/tonne with some low-level purchases, and settle at 2630-2760 CNY/tonne today. (Tianjin 2760, Shandong 2725-2730, Jiangsu 2700-2710, Dongguan 2630-2640, and Guangxi 2630-2650.) China’s soybean imports will surpass a monthly average of 10 mln tonnes between May and August, and its soybean crush hit a new high of 2.09 mln tonnes last week. Weekly soybean meal inventories in coastal regions thus rose by 42% to 520,000 tonnes. Mills in Guangdong and Guangxi have quickened up deliveries, and in some regions, some even have to suspend production due to swelling inventories. Fundamentals now are bearish to soybean meal prices. However, soybean meal shipments are also increasing, a sign that mid-to-downstream buyers have set to replenish in the wake of a rise on the DCE. Besides, market participants are concerned about the implementation of the US-China phase one trade deal, as recent moves by the U.S. side have added uncertainties to relations between these two countries. Hence, DCE meal futures continue rising, regardless of domestic supply pressure. Short-term soybean meal may follow futures to fluctuate to rebound moderately, but the market is still in need of practical bullish factors. Buyers are suggested to replenish for appropriate stocks and not chase after excessively high prices.
Imported rapeseed meal: U.S. President Donald Trump warned that Washington would react “very strongly” if China sticks to impose the national security legislation on Hong Kong. Due to inflamed tensions between U.S. and China, US soybeans closed down on last Friday, but domestic meals futures opened higher and moved upward. Imported rapeseed meal price settles at 2,240-2,350 CNY/tonne in coastal areas today, with not much trading volume. Moreover, the tensions between China and Canada have yet to be eased, the relations between China and Australia become strained as well. In this case, rapeseed crush stays at low levels, boosting rapeseed meal market to rebound. However, rapeseed meal stocks in coastal areas increased by 65% to 24,000 tonnes last week. Except that, the monthly arrival of soybeans would likely exceed 10 mln tonnes from May to August, so soybean crush hit a new record high of 2.09 mln tonnes with a rise of 9% from the previous week, which caused soybean meal stocks to continue rising. On the other hand, downstream enterprises are still wary of taking a purchase as the demand for meats is impacted by the coronavirus pandemic. As the upward momentum of rapeseed meal price is still limited in the near term, the overall market is projected to follow futures to fluctuate moderately. Therefore, participants can see whether U.S.-China tensions will affect the implement of trade deal or not. And if the trade war begins again, the market will be strong at home but weak abroad. FYI, buyers can make proper replenishment on the dips and maintain safety inventory.
Imported fishmeal: Imported fishmeal prices are stable in a partial decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,500-11,700 CNY/tonne, down 100 CNY/tonne from last Friday; Peruvian higher-quality SD with 65% protein content is 11,800-12,200 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 13,600-13,700 CNY/tonne, down 100 CNY/tonne from last Friday. Domestic fishmeal has already been at high prices at present, so feed mills are cautious in purchasing under dismal demand. Fishmeal trading deals are mainly made through negotiation. 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 still 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 56,000 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 higher by 50 USD at 1,500 USD/tonne for Peruvian Standard with 65% protein content and higher by 50 USD at 1,730 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 decline of 50 CNY/tonne today. From May to August, the monthly arrival of soybeans will exceed 10 mln tonnes. Last week, soybean crush hit a new record high of 2.09 mln tonnes, and soybean meal stocks in coastal regions also kept rising to 520,000 tonnes with a jump of 42% from a week earlier. In this case, the fundamentals of soybean meal are bearish, which is also negative for cottonseed meal market. Besides, the price of cottonseed meal has surpassed soybean meal, and the demand for cottonseed meal is limited due to low cost performance. Thus, cottonseed meal price is depressed by these factors. But cottonseed price remains high, and the operation rate stays at a low level. In addition, the tensions between U.S. and China inflame, boosting domestic meals price. Consequently, meals on Dalian Commodity Exchange go up after high open today, and spot soybean meal up by 20-40 CNY/tonne. Therefore, the price declines of cottonseed meal are also restricted. It is predicted that short-term cottonseed meal price may continue to adjust with fluctuations. FYI, buyers can make small replenishment on the dips but not chase up price too excessively.
(USD $1=CNY ￥7.12)
