Today (Jun 1), the market for meals in China is shown as follows:
Soybean meal: U.S. President Donald Trump said in a press last Friday that his administration would revoke special treatment on Hong Kong, bar Chinese graduate students with potential military ties from studying the U.S., and investigate into Chinese firms listed in the U.S.. No economic sanctions or trade activities was mentioned in the announcement, nor did it jeopardize the phase one trade deal between the two nations. The severity of this sanction was below the market forecast, so U.S. stock markets rapidly rallied after his speech. U.S. soybean futures just edged lower on last Friday. The foreign exchange rate of CNY also moved significantly higher, and rise above 7.13 today. Meal futures swing to slightly lower on the Dalian Commodity Exchange today. Spot soybean meal declines by 10-20 CNY/tonne in weaker trading, with some deals signed on low basis. The price settles at 2630-2740 CNY/tonne in coastal regions. (Tianjin 2740, Shandong 2695-2750, Jiangsu 2685-2700, Dongguan 2630-2670, and Guangxi 2630-2660.) Soybean arrivals at domestic ports will hit an average of over 10 mln tonnes between June and August, and oil mills have kept operation rates at a very high level; hence, soybean meal stocks have risen for six consecutive weeks to level with the same level a year earlier. Soybean meal prices thus slightly decline on bearish fundamentals. However, the demand is getting better in the second quarter as farmers ramp up hog replenishment, according to feed plants. And there is still huge uncertainty in relations between China and the United States. Overall, soybean meal market is predicted to swing with an uptrend, and buyers can wait for low and stable prices to make appropriate replenishment.
Imported rapeseed meal: U.S. President Donald Trump said at the press conference Friday that he would begin the process of eliminating special treatment for Hong Kong, ban Chinese graduate students considered with ties to the military entering U.S. and launch an investigation into Chinese firms listed in U.S.. But he did not mention any economic sanction or trade action and undermine phase one trade deal between the two countries. As the severity of sanctions was lower than market expectations, U.S. stocks rapidly rose from low levels after Trump’s speech. US soybean futures only posted a slight decline on Friday. Also, the Chinese Yuan rebounded sharply and exceeded 7.13 against the dollar in offshore. Besides, rapeseed meal futures on Zhengzhou Commodity Exchange fall back with fluctuations today, and rapeseed meal price in coastal regions settles down 20-30 CNY/tonne at 2,250-2,330 with tepid trading. Seeing over 10 mln tonnes of soybean arrivals each month from June to August, weekly soybean crush will remain upwards of 2 mln tonnes and there will be six consecutive weeks of growth in soybean meal stocks in coastal areas. Accordingly, these are still bearish for fundamentals. Likewise, the demand for meats has been greatly impacted by the coronavirus pandemic, so downstream enterprises are still wary of taking purchase and there are only few trading volume in rapeseed meal, which curbs meals price. In addition, Huawei’s CFO Meng Wanzhou was dealt a setback by Canadian court, which soured ties between Ottawa and Beijing. Therefore, Canadian rapeseed imports are still restrained, and the price declines of rapeseed meal are still limited in the near term. Buyers can make appropriate replenishment upon low and stable price.
Imported fishmeal: Imported fishmeal prices are stable with a partial decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,300-11,400 CNY/tonne, down 100 CNY/tonne from last Friday; Peruvian higher-quality SD with 65% protein content is 11,600-11,700 CNY/tonne, down 100 CNY/tonne from last Friday; Peruvian higher-quality SD with 67% protein content is 12,400-12,700 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,400-13,600 CNY/tonne, down 100 CNY/tonne from last Friday. Domestic feed plants are in a cautious mood due to the tepid demand, and Peru’s fish catches have been better now, so that some domestic traders become more bearish. However, most domestic fishmeal enterprises now do have high stocks. In addition, Peru is in the dry season now when seas wave are furious, so there is still uncertainty in fish catches. Overall, domestic fishmeal market is predicted to stay stable with slight adjustments in the short run. Stocks at port: Huangpu 60,000 tonnes, Fuzhou 21,000 tonnes, Shanghai 38,000 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 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 28th (local time), fish catches in the first season of 2020 total 438,101 tonnes, taking up 18.16% of the total quota of 2.413 mln tonnes and with the fishing average at 27, 000 tonnes per day and 1,974,899 tonnes remaining available.
Cottonseed meal: Cottonseed meal prices keep steady with partial rises of 30-50 CNY/tonne today. With the upcoming wheat harvest, the operation rate among oil mills is trending down. But factories in Xinjiang barely have cottonseed meal inventory. Accordingly, the prices in some regions are boosted. On the other hand, U.S. President Donald Trump said at the press conference last Friday that he would begin the process of eliminating special treatment for Hong Kong, cancel visas for Chinese graduate students considered with ties to the military and launch an investigation into Chinese firms listed in U.S.. But he did not mention any economic sanction or trade action and undermine phase one trade deal between the two countries. As the severity of sanctions was lower than market expectations, U.S. stocks rapidly rose from low levels after Trump’s speech. US soybean futures only posted a slight decline on Friday. Also, the Chinese Yuan rebounded sharply and exceeded 7.13 against the dollar in offshore. Besides, meals on Dalian Commodity Exchange fall back today, and spot soybean meal down by 10-20 CNY/tonne. Moreover, the price of cottonseed meal has surpassed soybean meal, and the demand for cottonseed meal is limited due to low cost performance. Therefore, short-term cottonseed meal price may fluctuate to rebound moderately before an easing of Sino-US tensions.
(USD $1=CNY ￥7.13)
