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Daily Review on Meal Market in China--7/17/2020

2020-07-17 www.cofeed.com

Today (Jul 17), the market for meals in China is shown as follows:

 

Soybean meal: U.S. soybean futures rose on Thursday after the U.S. Department of Agriculture reported sales of 522,000 tonnes of U.S. soybeans to China. And meal futures continue rising on China’s Dalian Commodity Exchange today. Spot soybean meal prices mostly go up 10-30CNY, attracting some low-level purchases. Specifically, the prices sit at 2830-2940 CNY/tonne in coastal regions. (Tianjin 2940, Shandong 2885-2900, Jiangsu 2850-2870, Dongguan 2830-2860, and Guangxi 2860-2880.) The recent recovery in hog population and the peak season for aquaculture have together improved the demand for soybean meal in China. Domestic crushers have limited soybean meal for sales in July and have also sold a lot of August meal output. Hence, meal prices are buoyed. However, DCE crush margins have climbed noticeably higher at present, and soybean arrivals at domestic ports have been huge for months, so crushers have been keeping soybean crush at a very high level and some of them even come to a halt due to bulging meal inventories. Moreover, 10 provinces in China are forecast to see heavy rains in days, which will again affect the delivery of soybean meal. Therefore, soybean meal will have limited rises in price. Tensions keep escalating between China and the United States. And U.S. soybean futures could still gain support from the crop weather. Overall, soybean meal prices will probably keep range-bound and strengthening.

 

Imported rapeseed meal: U.S. soybean futures on Thursday and Meals futures in China further rose. And rapeseed meal price in coastal regions partly settled up 10 CNY/tonne at 2,270-2,360 CNY/tonne, with tepid trading. Rapeseed crush stays at lows as rapeseed imports are still restricted amid tensions between Ottawa and Beijing. Likewise, the tensions between U.S. and China are heightening. And US soybean futures are bolstered by people’s concern over weather condition across crop area. Besides, soybean meal supply available for sale get tightened as stocks in July basically have been pre-sold, leading to a price hike. And then, rapeseed meal market is boosted. As soybean arrival at ports is upwards of 10 mln tonnes in July and August, the operation rate among crushing mills remains super high, causing a consecutive increase in soybean meal stocks. And some factories even halt the operation due to overstock. Driven by the bearish factors in fundamentals, price rises of rapeseed meal are curbed. Therefore, short-term rapeseed meal price is projected to fluctuate to keep strengthening.

 

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 11,000-11,300 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 11,500-11,700 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 12,500-12,800 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,300-13,500 CNY/tonne, down 200 CNY/tonne.

 

As Peruvian fishing companies have completed more than 90% of the country’s 2.413-mln-tonne of anchovy quota till now and are expected to exhausted the total quota this month, local manufacturers have little intention to support prices and offered preferential prices for bulk purchases. And in China, the demand for fishmeal does not pick up very much, for rains have influenced aquaculture in most southern regions. Hence, domestic traders have slightly lowered down their offer prices to attract some purchases. However, fishmeal inventories at ports have fallen to 95,000 tonnes in China at present, so traders do not intend to continue reducing prices due to small Peruvian fishmeal in stock. Overall, fishmeal market is predicted to steady with slight declines in the short run.

 

Stocks at ports: Huangpu 44,000 tonnes, Fuzhou 16,000 tonnes, Shanghai 24,000 tonnes, Tianjin 1,000 tonnes, Dalian 5,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports.

 

FOB quotes from foreign markets today: It is quoted steadily at 1,250 USD/tonne for Peruvian Standard with 65% protein content and at 1,480 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted at 1,290 USD/tonne, and super with 68% protein content at 1,520 USD/tonne.

 

Cottonseed meal: Cottonseed meal prices mainly keep steady and partly rise by 20-100 CNY/tonne today. The operation rate among crushing mills is low, and the cost remains high. U.S. soybean futures further rose on Thursday as USDA announced to sell 522,000 tonnes of soybeans to China. And meal futures continued rising on Dalian Commodity Exchange today, and spot soybean meal mostly up by 10-30 CNY/tonne. Hence, cottonseed meal market is bolstered by these factors. However, soybean arrival is huge in quantity in recent months due to a distinct improvement in crush margins, so crushing mills raise the operation rate and some even halt the operation due to overstock. Besides, the demand for cottonseed meal is limited due to low cost performance, so the final price is negotiable. In addition, the tensions between U.S. and China have heightened. Moreover, markets are concerned about weather condition across soybean area. Leading by bullish news, cottonseed meal market is likely to keep strengthening in the near term.

 

(USD $1=CNY ¥7.00)