Today (Jul 27), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures slid last Friday as the U.S. and China informed each other to close consulates, but meal futures open high and post sharp gains on China’s Dalian Commodity Exchange (DCE) today on U.S.-China tensions and as oil futures longs take profits. Spot soybean meal prices see a rise of 50-80 CNY/tonne to 2,990-3,170 CNY/tonne in coastal regions. (Tianjin 3170, Shandong 3060-3080, Jiangsu 3040-3070, Dongguan 2990-3050, and Guangxi 3000-3060.) Swine population in China has been constantly growing due to handsome breeding margins and aquaculture is also going along in full swing; hence, the demand for meal has picked up noticeably. In addition, soybean meal has a higher price value, which makes it enjoy a higher ratio in feed formula. In the week ending July 24^th, soybean meal inventories fell 0.5% to 875,000 tonnes. Oil mills are trying to raise soybean meal prices, as they have presold a huge quantity of soybean meal and as participants are concerned about future imports of soybeans due to rising US-China tensions. Spot soybean meal prices have seen larger rises than futures prices. In the context of U.S.-China tensions and weather-driven U.S. soybean market, soybean meal market in China will keep a strengthening trend. DCE meal futures are narrowing down gains after rushing high in early trading, so buyers with adequate stocks can wait for the moment.

Imported rapeseed meal: U.S. soybean futures closed lower on Friday as the weather forecast called for a rain in Midwest which might boost crop outlook. But the ties between U.S. and China have soured, bulling meal futures prices in China. And meal futures in China sharply rose with high opens today due to an arbitrage of buying oils and selling meals. Rapeseed meal price in coastal regions settled up 30-40 CNY/tonne at 2,390-2,450 CNY/tonne, with tepid trading. Both rapeseed crush and inventory are staying at historical lows as rapeseed imports are restricted amid tensions between Ottawa and Beijing. Last week, rapeseed meal stocks in coastal regions down to 22,000 tonnes with a weekly decline of 7%. Besides, there still exists uncertainty in U.S.-China relations. Moreover, US soybean is in a key period for growing, which may be easily affected by the weather condition. These are raising bullish sentiment of dealers and oil plants, so they tend to prop up price. Therefore, rapeseed meal market is bolstered by advance of soybean meal price. It is expected that short-term rapeseed meal price may be trending up with fluctuations. Buyers can wait for low and stable price to make proper replenishment.

Imported fishmeal: Imported fishmeal prices are stable with a decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,900-11,200 CNY/tonne, down 100-300 CNY/tonne from last Friday; Peruvian higher-quality SD with 65% protein content is 11,500-11,600 CNY/tonne, down 100 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 12,500-12,700 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,100-13,400 CNY/tonne.

The demand in the aquaculture sector for fishmeal does not pick up very much, as many regions have been suffering from heavy rains in China for weeks. Moreover, the cost of importing fresh fishmeal will be lower relatively. Hence, some traders undercut to lock in profits today, which adds some bearish sentiment to domestic market. However, fresh fishmeal cargoes have not reached ports yet, and fishmeal inventories at domestic ports have fallen to 92,000 tonnes now, 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 adjustments in the short run.

Stocks at ports: Huangpu 42,000 tonnes, Fuzhou 15,000 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 rise by 50-100 CNY/tonne and partly up by 200 CNY/tonne. For the moment, factories have no pressure from inventory as the operation rate among crushing mills is low, and the cost remains high. The tensions between U.S. and China bull meal futures in China, and meals on Dalian Commodity Exchange surge with high opens due to an arbitrage of buying oils and selling meals. And spot soybean meal is up 50-80 CNY/tonne. These are boosting cottonseed meal market. Besides, the crush margins of imported soybean futures have improved, spurring China to increase purchase of U.S. soybean. In July and August, the monthly arrival of soybean at ports will be past 10 mln tonnes, leading to a super high operation rate among soyoil mills. But the oversupply in global monetary brings an inflation expectation, and there still exists uncertainty in U.S.-China relations. Moreover, markets are concerned about weather condition across soybean area. Leading by bullish factors, cottonseed meal market is likely to extend the rally.

(USD $1=CNY ¥7.00)