Today (Jul 30), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures fell on Wednesday, and meal futures also extend losses on China’s Dalian Commodity Exchange today. Spot soybean meal prices drop 10-30 CNY/tonne to 2,900-3,000 CNY/tonne in coastal regions, and the market is in tepid trading. (Tianjin 3000, Shandong 2980-3000, Jiangsu 2925-2970, Dongguan 2900-2950, and Guangxi 2940-2970.)

The declines in soybean meal prices can be attributed to huge soybean imports, high soybean crush and lukewarm trading this week. Mid-to-downstream buyers are cautious and digesting their inventories after completing replenishment in the last two weeks. Meanwhile, soybean imports will be huge in both July and August, and domestic crushers have still maintained very high operation rates.

But there will be limited space for further declines. Swine stocks have been increasing and aquaculture is also in full swing in China now, and soybean meal has a higher price value than its alternative meals. Soybean meal inventories still fall amid high soybean crush, also a sign that the demand is improving. Moreover, crushers have a huge quantity of contracts waiting to be fulfilled, for some of them have presold August soybean meal and completed many forward-month sales. Besides, China and the United States are still in tensions.

Soybean meal market is predicted to have some upward potential following this round of corrections, and buyers are suggested to wait for low and stable prices to make appropriate replenishment.

Imported rapeseed meal: Both U.S. soybean futures on Wednesday and meal futures in China today further declined. Rapeseed meal price in coastal regions settled down 10-20 CNY/tonne at 2,290-2,380 CNY/tonne, with tepid trading. Due to considerable crush margins, soybean arrival at ports in August will be as much as 10.10 mln tonne, which leads to a super high operation rate. Hence, rapeseed meal price is weighed down. However, both rapeseed crush and rapeseed meal inventory stay at low levels due to limited rapeseed imports amid tensions between China and Canada. Moreover, the breeding industry is resuming gradually and aquaculture has entered into a peak season, seeing a recovery of demand. Besides, the tensions between U.S. and China have been escalating, and U.S. soybean market is driven by weather condition across crop area. Therefore, rapeseed meal price may not drop too much and is expected to rebound after a wave of fall. Buyers can stay on the sideline and make appropriate replenishment upon low and stable price.

Imported fishmeal:  Imported fishmeal prices are stable 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; Peruvian higher-quality SD with 67% protein content is 12,400-12,500 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 13,100-13,300 CNY/tonne.

The demand in the aquaculture and swine sectors for fishmeal does not pick up very much, and the cost of importing fresh fishmeal will be lower relatively; hence, some traders have no intention to support prices, which adds some bearish sentiment to domestic market. However, fresh fishmeal cargoes have not reached ports en masse yet, and fishmeal inventories at domestic ports have fallen to 95,000 tonnes now, so traders are reluctant 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 43,000 tonnes, Fuzhou 15,000 tonnes, Shanghai 26,000 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 are steady with a rise of 50 CNY/tonne today. For the moment, factories have no pressure from inventory as the operation rate among crushing mills is low and the demand in aquaculture has entered into a peak season. And the cost remains high. Hence, cottonseed meal market is supported. On the other hand, 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. US soybean futures further declined on Wednesday. Also, meals futures on Dalian Commodity Exchange continued falling today, and spot soybean meal down by 10-30 CNY/tonne. Thus, cottonseed meal market is dampened by these factors. In the near term, the price will likely fluctuate affected by the falls of soybean meal. But due to concerns over U.S.-China tensions and limited availability of goods supply, cottonseed meal market will be still in a strong trend overall.

(USD $1=CNY ¥6.99)