Today (Aug 4), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures firmed on strong export sales on Monday, but meal futures edge lower on China’s Dalian Commodity Exchange today. Spot soybean meal prices go down 10-30 CNY/tonne to 2,910-3,020 CNY/tonne in coastal regions, and the trading is thin. (Tianjin 3010, Shandong 2970-2990, Jiangsu 2925-2960, Dongguan 2900-2970, and Guangxi 2940-2970.) China’s soybean arrivals will surpass 10 million tonnes in August and crushing plants are maintaining extremely high operation rates, which are both potentially bearish to the market. Moreover, U.S. crop conditions along with flowering and pod setting rates are higher than the forecast, so that the USDA is expected to raise the production estimates in its August report. Nevertheless, 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 a downtrend by a weekly decline of 1.7% to 860,000 tonnes, and millers 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. Overall, soybean meal prices will probably swing with a strengthening trend in the short term.

Imported rapeseed meal: U.S. soybean futures closed higher on Monday underpinned by great demand. But meal futures in China edged lower today. Rapeseed meal price in coastal regions settled down 10 CNY/tonne at 2,280-2,370 CNY/tonne, with tepid trading. The huge imports of soybean, coupled with high crush still carry the potential to bear the market. And market expects that USDA in August will raise its production estimates for US soybeans due to a good crop condition, dragging down meals prices. In addition, both rapeseed inventory and crush stay at a historical low due to limited rapeseed imports amid tensions between China and Canada, leading to a better demand for soybean meal. Last week, soybean meal stocks in coastal regions dropped to 860,000 tonnes with a weekly decline of 1.5%. But soybean meal for August contract has been basically sold out, and same goes for forward contracts. Many oil plants mainly fulfill the contracts for the moment. Accordingly, the overall soybean meal market keeps strengthening, which boosts rapeseed meal price. And short-term rapeseed meal price is projected to fluctuate at a narrow range. Buyers can wait and see.

Imported fishmeal: Imported fishmeal prices are stable with a downtrend today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,800-11,100 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 11,400-11,500 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 13,000-13,100 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 reasonably adjusted their quotes. 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 steadily 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 at 1,220 USD/tonne, and super with 68% protein content at 1,450 USD/tonne.

Cottonseed meal: Cottonseed meal prices keep steady today and up by 50-70 CNY/tonne in some regions due to a halt of operation. Cottonseed is pricey and factories have no pressure from inventory, bolstering cottonseed meal market. But the huge imports of soybean, coupled with high crush still carry the potential to bear the market. Meal futures today edge lower on Dalian Commodity Exchange, and spot soybean meal drops by 10-30 CNY/tonnes in coastal regions. Moreover, the demand for cottonseed meal is limited due to lower cost performance compared to soybean meal. Thus, these have dampened cottonseed meal price. Therefore, short-term cottonseed meal price will probably fluctuate at a narrow range. But over the concerns about U.S.-China tensions and increasing demand in breeding, cottonseed meal market still maintain a strong trend overall.

(USD $1=CNY ¥6.98)