Today (Aug 3), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures rose last Friday as soybean oil futures surged nearly 2% on strong demand from the soy-based biodiesel fuel sector. Meal futures post gains but actually stay below the previous close on China’s Dalian Commodity Exchange today, as investors buy oils and selling meals to book profits. Spot soybean meal prices steadily go up by 10-20 CNY/tonne to 2,910-3,020 CNY/tonne in coastal regions, attracing some low-level purchases. (Tianjin 3020, Shandong 2990-3000, Jiangsu 2950-2970, Dongguan 2910-2960, and Guangxi 2950-2970.) The feed demand in hog sector keeps increasing and soybean meal has a higher value-to-price ratio than alternative meals, which together enhance the demand for soybean meal. Soybean meal stocks continue to decrease slightly, and crushers are mainly carrying out contracts at present, for some of them have completed the sales of August soybean meal and some forward-month sales. These together prop up soybean meal prices in China. However, huge soybean imports and high soybean crush are still bearish factors underlying in domestic soybean meal market. In addition, the market forecast that the USDA will raise its production estimates for U.S. soybean crops due to benign crop conditions. Overall, short-term soybean meal market is predicted to swing with a strengthening trend, and buyers are suggested to buy dips for appropriate stockpiles and remain cautious in chasing after higher prices.

Imported rapeseed meal: Soybean oil price surged nearly 2% on a strong demand in biodiesel industry, thereby U.S. soybean futures closed higher on Friday. But rapeseed meal futures on Zhengzhou Commodity Exchange swung lower today. Rapeseed meal price in coastal regions settled down 10-20 CNY/tonne at 2,290-2,380 CNY/tonne, with tepid trading. Rapeseed meal stocks in coastal regions increased by 52% to 33,000 tonnes in the previous week. Additionally, driven by considerable crush margins of soybean, China takes a bulk buying, seeing an arrival of over 10 mln tonnes of soybean in August. In this case, soybean crush picked up to 2.06 mln tonnes, a rise of 5.4%, which drags down rapeseed meal market. However, rapeseed crush stays 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. Furthermore, the ties between U.S. and China have been souring, and U.S. soybean market is driven by weather condition across crop area. Accordingly, the overall soybean meal market keeps strengthening, which boosts rapeseed meal price. Thus, short-term rapeseed meal price is projected to fluctuate at a narrow range. Buyers are suggested to make proper replenishment upon low and stable price.

Imported fishmeal: Imported fishmeal prices decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,800-11,100 CNY/tonne, down 100-200 CNY/tonne from last Friday; Peruvian higher-quality SD with 65% protein content is 11,400-11,500 CNY/tonne, down 100 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 13,000-13,100 CNY/tonne, down 100-300 CNY/tonne. As the weather gets favorable and following a rise in hog prices, aquaculture and hog breeding are both recovering, which leads to a pickup in the demand for fishmeal. Meantime, fresh fishmeal cargoes from Peru are reaching ports, and the cost of import is gradually declining. Hence, traders have adjusted their quotes today, so as to achieve small profits but quick turnover. This is bearish to domestic fishmeal prices. Overall, domestic fishmeal prices are predicted to steady with slight declines in the near term.

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: Sept/Oct shipments are quoted lower 50 USD at 1,200 USD/tonne for Peruvian Standard with 65% protein content and at 1,430 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted lower 70 USD at 1,220 USD/tonne, and super with 68% protein content at 1,450 USD/tonne.

Cottonseed meal: Cottonseed meal prices keep steady with partial declines of 30-70 CNY/tonne, and in several regions the price rises by 50 CNY/tonne. The huge imports of soybean, coupled with high crush still bear the market. And the demand for cottonseed meal is limited due to lower cost performance compared to soybean meal. Thus, these have dampened cottonseed meal price. But cottonseed price remains high. Meal futures on Dalian Commodity Exchange go up today, and spot soybean meal steadily up by 10-20 CNY/tonne in coastal regions. In this case, cottonseed meal market is also bolstered. Therefore, short-term cottonseed meal price will probably fluctuate at a narrow range. But due to concerns over U.S.-China tensions and increasing demand in breeding, cottonseed meal market will be still in a strong trend overall.

(USD $1=CNY ¥7.00)