Today (Aug 7), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures extend losses on Thursday, and meal futures edge lower on China’s Dalian Commodity Exchange today. Spot soybean meal prices go down 10-20 CNY/tonne to 2,840-2,940 CNY/tonne in coastal regions, attracting some low-level purchases. (Tianjin 2940, Shandong 2890-2940, Jiangsu 2855-2900, Dongguan 2840-2870, and Guangxi 2880-2920.) Huge soybean arrivals at ports and high soybean crush are the potential downsides for domestic soybean meal market. Moreover, U.S. farmers are set to harvest abundant soybeans this autumn thanks to favorable weather conditions, and Brazil is also expected to see a bumper crop in the new planting season. These are curbing soybean meal prices in China. Nevertheless, there is strong-than-forecast demand for soybean meal in China now, as the demand for hog feed is increasing and soybean meal has a higher value-to-price ratio than alternative meals. In this case, domestic soybean meal inventories have been declining for a fourth straight week even under high soybean crush. Add to this, many millers have sold out August soybean meal and also completed a high proportion of forward sales, so that they are propping up prices while busy carrying out contracts. Overall, short-term soybean meal prices are predicted to have limited declines and keep range-bound to adjust, and buyers can wait for low and stable prices to make appropriate replenishment.

Imported rapeseed meal: US soybean yield is expected to set a historical record, and Brazilian new soybean crop also has prospects for a bumper harvest. And some traders have aligned positions. In this case, US soybean futures on Thursday and rapeseed meal futures on Zhengzhou Commodity Exchange today further declined. Rapeseed meal price in coastal regions settled down 20-30 CNY/tonne at 2,230-2,310 CNY/tonne, with tepid trading. Besides, soybean arrival at ports in August will surpass 10 mln tonnes, leading to an extremely high operation rate. As a result, the huge imports of soybean, along with high crush still carry the potential to bear the market. Except that, the weather in US soybean area is favorable. These have together depressed meals prices. However, rapeseed crush stays at low levels due to limited rapeseed imports amid tensions between China and Canada. Moreover, aquaculture has entered into a peak season and breeding industry is also recovering gradually. Consequently, soybean meal stocks for August contract have been sold out. On the other hand, people still have fears about the rising tensions between the US and China, which may bolster rapeseed meal price. Therefore, rapeseed meal price will likely fluctuate at a narrow range. Buyers can stay on the sideline and make appropriate replenishment on the dips.

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 10,800-11,100 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 12,800-13,100 CNY/tonne, down 200 CNY/tonne from yesterday. Fresh Peruvian fishmeal of lower cost is reaching ports and there are few purchases at high rates in the market, so that some traders have flexibly undercut their offers today. This has injected some bearish sentiment to domestic fishmeal market. However, the demand for fishmeal is improving as aquaculture is recovering under clear weather, which may reduce the downside space in the market. Overall, domestic fishmeal market is predicted to stay stable with a weakening trend in the near term as fresh fishmeal vessels are arriving. Participants can keep an eye on such key factors as the aquaculture and fresh fishmeal imports in China as well as the COVID-19 in Peru.

Stocks at ports: Huangpu 45,000 tonnes, Fuzhou 15,000 tonnes, Shanghai 27,000 tonnes, Tianjin 1,000 tonnes, Dalian 6,000 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 with some fluctuations of 50 CNY/tonne today. 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. U.S. soybean futures closed lower on Thursday. And meal futures on Dalian Commodity Exchange edged down today, and spot soybean meal declined by 10-20 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. It is predicted that short-term cottonseed meal price will fluctuate at a narrow range. But over the concerns about U.S.-China tensions and growing demand in breeding, cottonseed meal market still maintain a strong trend overall.

(USD $1=CNY ¥6.94)