Today (May 26), the market for meals in China is shown as follows:
Soybean meal: U.S. markets were closed Monday in observance of Memorial Day. And meal futures trade in a narrow range on the Dalian Commodity Exchange today. Spot soybean meal steadily fluctuates by 10-20 CNY/tonne with some low-level purchases, but the trading is not as good as yesterday. The price settles at 2610-2760 CNY/tonne in coastal regions. (Tianjin 2740, Shandong 2720-2730, Jiangsu 2670-2700, Dongguan 2610-2620, and Guangxi 2620-2630.) Monthly soybean imports will exceed an average of 10 mln tonnes between May and August in China, and its weekly soybean crush hit a fresh high of 2.09 mln tonnes last week. Weekly soybean meal stocks surged further by 42% to 520,000 tonnes in coastal regions in the week ending May 22nd, and some mills in Guangdong and Guangxi have begun to speed up deliveries due to swelling inventories. Soybean meal prices are under pressure. However, China threatened counter-measures against the U.S. after the latter said it would make sanctions against the former for passing a national security law over Hong Kong issue. Traders keep increasing the amount of risk premium on souring US-China relations, so that meal futures swing to rebound. Buyers en masse make replenishment, increasing the trading in soybean meal market. Soybean meal traded 550,000 tonnes yesterday. Concerns over US-China tensions have temporarily overshadow bearish fundamentals, so short-term soybean meal market is predicted to follow futures to keep range-bound and rebound moderately. Participants can keep an eye on US-China relations, soybean shipments in Brazil and weather conditions in US crop belt. Buyers are suggested to replenish for appropriate stocks and not chase after excessively high prices.
Imported rapeseed meal: U.S. markets were closed yesterday. Meals on Dalian Commodity Exchange and rapeseed meal on Zhengzhou Commodity Exchange fluctuate at a narrow range today. And imported rapeseed meal price in coastal areas settles at 2,230-2,350 CNY/tonne with light trading volume. U.S. claimed to sanction China over the Chinese security legislation on Hong Kong, and China said it would take countermeasures, escalating tensions between U.S. and China. In this case, traders add the risk premium. Besides, rapeseed crush stays at low levels. Thus, meals prices are bolstered by these factors. 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. Accordingly, rapeseed meal price is curbed and will likely follow futures to fluctuate at a narrow range in the near term. In addition, Canadian court will announce its findings on the extradition trial of Meng Wanzhou, Huawei Technologies Chief Financial Officer on May 27. If the double criminality not convicted, Meng will be released in court, which may ease Canada-China relations. And it may be bearish for rapeseed meal price in China. Canadian media predicts that Meng will be favored, and participants should keep close eyes on it.
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; Peruvian higher-quality SD with 65% protein content is 11,800-12,000 CNY/tonne, down 200 CNY/tonne from yesterday; 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. Domestic fishmeal prices are at high levels at present, coupled with dismal demand, so feed plants are cautious in purchasing. Moreover, fish catches are going on wheels in Peru. Hence, some domestic fishmeal firms have slightly lowered down prices in order to pocket profits. 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 57,000 tonnes, Fuzhou 21,000 tonnes, Shanghai 37,000 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 steadily at 1,500 USD/tonne for Peruvian Standard with 65% protein content and 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. Fish catches in Peru: As of May 24th (local time), fish catches in the first season of 2020 total 282,794 tonnes, taking up 11.72% of the total quota of 2.413 mln tonnes and with 2,130,206 tonnes remaining available.
Cottonseed meal: Cottonseed meal prices keep steady with partial fluctuation of 20-50 CNY/tonne today. From May to August, the monthly arrival of soybeans will exceed 10 mln tonnes. Last week, soybean crush hit a new all-time 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 ago. 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. Also, most of mills in Xinjiang have no inventory of cottonseed meal. Therefore, these are bolstering cottonseed meal market. It is predicted that short-term cottonseed meal price may continue to adjust with fluctuations.
(USD $1=CNY ￥7.13)
