Today (Jun 2), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures ended fractionally lower on Monday. Amid tensions with Washington, Beijing told major state-run agricultural companies to pause purchases of some U.S. farm goods including soybeans, and Chinese buyers have also canceled an unspecified number of U.S. pork orders, according to a report by Bloomberg on Monday. But the news is still not officially confirmed so far. And also on Monday, China’s state-owned firms bought at least 3 cargoes of US soybeans, according to Reuters.
Meal futures swing to slightly lower on China’s Dalian Commodity Exchange today. Spot soybean meal fluctuates by 10-20 CNY/tonne in weaker trading, attracting some purchases on low basis. The price settles at 2610-2740 CNY/tonne in coastal regions. (Tianjin 2740, Shandong 2710-2750, Jiangsu 2685-2690, Dongguan 2610-2640, and Guangxi 2630-2650.)
China’s soybean arrivals at ports are expected to surpass a monthly average of 10 mln tonnes between June and August. As oil mills continue keeping operation rates at a very high level, China’s weekly soybean meal stocks rose for a sixth week by 23% to 640,000 tonnes. Bearish fundamentals are still weighing down rises in soybean meal prices. However, the demand is getting better in the second quarter as farmers ramp up hog replenishment, according to feed plants. Moreover, tensions between China and the US could get escalating at any time. Hence, there is limited downside space in soybean meal market. Overall, China’s soybean meal market is predicted to swing to adjust and to have some upward potential. Buyers are suggested to buy dips to keep appropriate stocks and remain cautious in chasing after higher prices.
Imported rapeseed meal: China has ordered major state-run firms to pause some purchase of farm goods from the United States, including soybeans, Bloomberg News reported on Monday. And Chinese buyers have also cancelled an unspecified number of U.S. pork orders, according to the report. But the news has not been officially confirmed. Moreover, Chinese state-owned firms still bought at least three cargoes of U.S. soybeans on Monday night. And U.S. soybean futures continued the small decline last night. Besides, rapeseed meal futures on Zhengzhou Commodity Exchange fall back slightly today, and rapeseed meal price in coastal regions remains 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 remains upwards of 2 mln tonnes. And soybean meal stocks increase by 23% to 640,000 tonnes over six consecutive weeks in coastal areas. Likewise, the demand for meats has been greatly impacted by the coronavirus pandemic, so downstream enterprises are loath to purchase and there is no trading volume in rapeseed meal. With bearish factors in fundamentals, meals prices are under pressure. 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 but not chase up price too excessively.
Imported fishmeal: Imported fishmeal prices are stable today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 11,300-11,400 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 11,600-11,700 CNY/tonne; 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.
A majority of fishmeal firms in China have low fishmeal stocks at present. And fish catches in Peru is still under uncertainty as seas wave are furious in current dry season. Hence, fishmeal traders are not willing to further lower down prices. However, Chinese feed plants are in a cautious mood due to the tepid demand, and fishmeal firms do not intend to raise prices. 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 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 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 31st (local time), fish catches in the first season of 2020 total 554,086 tonnes, taking up 22.96% of the total quota of 2.413 mln tonnes and with the fishing average at around 29, 000 tonnes per day and 1,858,914 tonnes remaining available.
Cottonseed meal: Cottonseed meal prices keep steady with a rise of 50 CNY/tonne today. The cost remains high. And with the upcoming wheat harvest, the operation rate among oil mills is trending down. But factories in Xinjiang barely have cottonseed meal inventory. Accordingly, cottonseed meal prices are boosted by these factors. China has ordered major state-run firms to pause some purchase of farm goods from the United States, including soybeans, due to the tensions between U.S. and China, Bloomberg News reported on Monday. But the news has not been officially confirmed. Moreover, Chinese state-owned firms still bought at least three cargoes of U.S. soybeans on Monday night. Besides, meals on Dalian Commodity Exchange fluctuate to fall slightly today. Additionally, the price of cottonseed meal has surpassed soybean meal, and the demand for cottonseed meal is limited due to low cost performance. As U.S.-China tensions could inflame at any time, short-term cottonseed meal price may fluctuate to rebound moderately.
(USD $1=CNY ￥7.12)
