Today (Jul 28), the market for meals in China is shown as follows:

Soybean meal: Chicago soybean futures edged higher on Monday due to strong export data, but Dalian meal futures decline today as futures prices are broadly lower on profit-taking. Spot soybean meal prices drop 30-70 CNY/tonne to 2,900-3,040 CNY/tonne in coastal regions. (Tianjin 3040, Shandong 3040-3060, Jiangsu 2990-3000, Dongguan 2900-2950, and Guangxi 2940-2980.) Domestic crushing plants have been working at high capacity due to huge soybean arrivals. Moreover, downstream buyers are cautious about current high prices, so that soybean meal is in thin trading. Soybean meal market now sees a wave of noticeable declines. But swine and aquaculture farming sectors are recovering, and soybean meal enjoys a larger share in feed thanks to its price value. Hence, soybean meal is in fair deliveries and its inventories are declining in spite of high soybean crush. In addition, China and the United States are in escalating tensions, and investors are sensitive to U.S. soybean crop weather now. Overall, soybean meal still has some upward potential after this round of declines. Buyers are suggested to wait for low and stable prices to make appropriate replenishment.

Imported rapeseed meal: U.S. soybean futures closed higher on Monday. But futures markets basically declined today result from capital flights. And meal futures in China fell back with low opens. Rapeseed meal price in coastal regions settled down 40-80 CNY/tonne at 2,310-2,410 CNY/tonne, with tepid trading. China keeps purchasing soybeans driven by the considerable crush margins, with a monthly soybean arrival of over 10 mln tonnes at ports in July and August, leading to a super high operation rate. Hence, rapeseed meal price is weighed down by the bearish factors in fundamentals. However, both rapeseed crush and inventory are staying at historical lows as rapeseed imports are restricted amid tensions between China and Canada. Moreover, the aquaculture has entered into a peak season, seeing a recovery of demand. Last week, soybean meal stocks still down by 0.5% to 875,000 tonnes despite a high production. Besides, markets are afraid that subsequent imports of US soybeans could be affected by souring ties between U.S. and China, which may bolster rapeseed meal price. In light of the dramatic falls of futures, 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; Peruvian higher-quality SD with 65% protein content is 11,500 CNY/tonne, down 100 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 12,400-12,700 CNY/tonne, down 100-200 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,100-13,300 CNY/tonne, down 100-200 CNY/tonne.

The demand in the aquaculture and swine sectors for fishmeal does not pick up very much due to the African swine fever and 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.

Fish catches in Peru: As of July 24th (local time), fish catches in the first season of 2020 total 2,319,881 tonnes, exhausting 96.14% of the total quota of 2.413 mln tonnes and with the fishing average at around 32,000 tonnes per day and 93,119 tonnes remaining available.

Cottonseed meal: Cottonseed meal prices are steady but up 100 CNY/tonne in several regions. For the moment, factories have no pressure from inventory as the operation rate among crushing mills is low, and the cost remains high, supporting cottonseed meal market. The improvement in crush margins of imported soybean futures has stimulated China’s purchase of U.S. soybeans. 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. Besides, futures markets decline due to a profit taking. Meals on Dalian Commodity Exchange also fall back, and spot soybean meal down by 30-70 CNY/tonne. Thus, cottonseed meal market is dragged down by these factors. But due to U.S.-China tensions and weather-driven US soybean market, cottonseed meal market will be still in a strong trend overall. In the near term, the price will likely fluctuate affected by the falls of soybean meal. Buyers can take a wait-and-see attitude.

(USD $1=CNY ¥6.99)