Today (May 27), the market for meals in China is shown as follows:
Soybean meal: U.S. stock and energy markets surged, as participants were upbeat about progress on a coronavirus vaccine and an economic recovery. Moreover, China had purchased 258,000 tonnes of US soybeans. Hence, U.S. soybean futures closed with gains on Tuesday. Meal futures also move further higher on the Dalian Commodity Exchange today. Spot soybean meal goes up by 20-40 CNY/tonne with some low-level purchases. The price settles at 2630-2790 CNY/tonne in coastal regions. (Tianjin 2790, Shandong 2760-2770, Jiangsu 2710-2740, Dongguan 2630-2670, and Guangxi 2640-2680.) Weekly soybean meal stocks rose by a large margins due to huge soybean imports and high soybean crush, which limits the rise in meal prices. However, market traders’ focus is mainly on China-US relations. US President Donald Trump suggested that his administration would take action against China this week over its move to enact a national security law over Hong Kong issues. Market participants are concerned about the implementation of the phase one trade deal between the two nations. The offshore exchange rate of CNY keep decreasing to 7.17, which lifts cost of import. DCE meal futures are bolstered to continue bouncing, and spot trading and deliveries have also markedly improved. Short-term soybean meal is predicted to follow futures to keep range-bound and rebound. Besides, the Canadian court will deliver a highly anticipated ruling Wednesday concerning the trial of Huawei Meng Wanzhou, so participants can also keep an eye on it. Buyers are suggested to replenish for appropriate stocks, but not to chase after excessively high prices.
Imported rapeseed meal: As markets were optimistic about the detent in coronavirus pandemic and economic recovery, U.S. stocks and energy markets surged last night, and the export competitiveness of U.S. agricultural products was buoyed by weaker U.S. dollar. Meanwhile, China brought in 258,000 tonnes of soybeans from U.S., which caused U.S. soybean futures closed much higher yesterday. Besides, both meals on Dalian Commodity Exchange and rapeseed meal futures on Zhengzhou Commodity Exchange go up today. And imported rapeseed meal price in coastal areas settles at 2,250-2,360 CNY/tonne, up 10-20 CNY/tonnes. Although the arrivals of imported soybean are huge in quantity from May to August, and soybean meal stocks rise rapidly amid the high operation rate among oil mills, markets mainly focus on the Sino-U.S. relations at the moment. President Donald Trump said U.S. were about to respond strongly to Chinese security legislation on Hong Kong and would announce it before the weekend, raising markets concerns over the implement of trade deal amid inflamed tensions between U.S. and China. Consequently, the exchange rate of offshore RMB plunged to 7.17 CNY/USD, which pushed up import cost. In addition, rapeseed crush stays at low levels, boosting rapeseed meal price. Therefore, short-term rapeseed meal market is likely to follow soybean meal to fluctuate to rebound moderately. Buyers can make appropriate replenishment on the dips but not chase up price too excessively. Likewise, the extradition trial of Huawei’s CFO Meng Wanzhou will be announced tonight, and buyers can keep close eyes on it (Only for reference).
Imported fishmeal: Imported fishmeal prices are stable 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; 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 feed plants are cautious in purchasing due to tepid demand and as fishmeal prices have been at high levels, and fish catches show a good picture in Peru; hence, some domestic fishmeal enterprises turn bearish and also loosen their prices in signing deals. In the short run, fishmeal market is predicted to stay stable with some slight corrections. Stocks at port: Huangpu 58,000 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.
Cottonseed meal: Cottonseed meal prices keep steady and up by 50 CNY/tonne in several regions today. Since markets were optimistic about the detent in coronavirus pandemic and recovery of economy, U.S. stocks and energy markets soared on Tuesday. And China brought in 258,000 tonnes of soybeans from U.S., leading to a surge in U.S. soybeans futures. For the moment, markets are focusing on Sino-US relations despite the huge arrival of soybeans and high operation rate among oil mills. President Donald Trump said U.S. were about to respond strongly to Chinese security legislation on Hong Kong and would announce it before the weekend, raising markets concerns over the implement of trade deal amid inflamed tensions between U.S. and China. Consequently, the exchange rate of offshore RMB plunged to 7.17 CNY/USD, which pushed up import cost. Besides, meals on Dalian Commodity rise further today, and spot soybean meal up by 20-40 CNY/tonne. Beyond that, 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 factors are bolstering cottonseed meal market. It is predicted that short-term cottonseed meal price may fluctuate to rebound moderately. FYI, buyers with insufficient inventory can make small replenishment on the dips but should remain cautious in chasing up prices.
(USD $1=CNY ￥7.11)
