Today (Jun 3), the market for meals in China is shown as follows:
Soybean meal: U.S. soybean futures sharply rose on Tuesday as the U.S. Department of Agriculture confirmed sales of U.S. soybeans to China. Meal futures swing to slightly higher on China’s Dalian Commodity Exchange today. Spot soybean meal fluctuates by 10-20 CNY/tonne to attract some purchases on low spot prices and forward basis. The price settles at 2630-2760 CNY/tonne in coastal regions. (Tianjin 2760, Shandong 2695-2740, Jiangsu 2660-2680, Dongguan 2630-2640, and Guangxi 2630-2650.) There are still a myriad of bearish fundamentals in China’s soybean meal market. Soybean crush margins are still fair on the DCE, and China is still purchasing U.S. soybeans. Besides, soybean meal stocks keep increasing, as mills are maintaining high operation rates and soybean imports are predicted to surpass an average of 10 mln tonnes between June and August. However, farmers are active in increasing hog stocks as hog prices have risen again recently. A pickup in feed sales also improves soybean meal shipments. In addition, the market can be easily affected by any development in tensions between China and the United States, which also provides risk premiums to soybean meal. Overall, soybean meal market is likely to increase after this round of fluctuations. Buyers are suggested to buy dips to keep appropriate stocks, but not to chase after excessively high prices at the moment.
Imported rapeseed meal: U.S. soybean futures closed higher last night as USDA confirmed China’s purchase. And rapeseed meal futures on Zhengzhou Commodity Exchange edges up today, and rapeseed meal price in coastal regions settles up 10-20 CNY/tonne at 2,250-2,350 with tepid trading. The ties between China and U.S. have yet to improve. Also, Huawei’s CFO Meng Wanzhou did not get released, so Canadian canola imports were still restrained, boosting rapeseed meal price. Nevertheless, Chinese buyers go on purchasing U.S. soybeans due to considerable crush margins of domestic futures. Seeing over 10 mln tonnes of soybean arrivals each month from June to August, the operation rate among soyoil mills stays at extremely high level and soybean meal stocks increase rapidly in coastal areas. Likewise, the demand for meats has been greatly impacted by the coronavirus pandemic, thereby affecting demand for meals products. And there has been no trading volume in rapeseed meal for two weeks. With bearish factors in fundamentals, the price rises of meals are limited. In light of tensions between U.S. and China, meals price is still bolstered. FYI, buyers need to maintain proper inventories but remain cautious in chasing up price.
Imported fishmeal: Imported fishmeal prices stay 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 61,000 tonnes, Fuzhou 21,000 tonnes, Shanghai 36,000 tonnes, Tianjin 1,000 tonnes, Dalian 9,000 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 June 1st (local time), fish catches in the first season of 2020 total 582,685 tonnes, taking up 24.15% of the total quota of 2.413 mln tonnes and with the fishing average at around 29, 000 tonnes per day and 1,830,315 tonnes remaining available.
Cottonseed meal: Cottonseed meal prices keep steady with a rise of 50 CNY/tonne today. U.S. soybean futures jumped last night as USDA confirmed that China continued purchasing U.S. soybeans. And meals on Dalian Commodity Exchange fluctuate to edge up today. Besides, the cost remains high. And the wheat harvest in Shandong has begun in succession, so oil mills reduce the operation rate. But factories in Xinjiang barely have cottonseed meal inventory. Accordingly, cottonseed meal prices are boosted by these factors. Additionally, the price of cottonseed meal has surpassed soybean meal, so some feed mills readjust the feed formula due to low cost performance. But the demand for cottonseed meal has been limited. As U.S.-China tensions could inflame at any time, short-term cottonseed meal price is likely to fluctuate to rebound moderately.
(USD $1=CNY ￥7.11)
