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Daily Review on Meal Market in China--8/28/2020

2020-08-28 www.cofeed.com

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

 

Soybean meal: U.S. soybean futures surged on Thursday, as the dryness in the Midwest could still be a threat to soybean yield and China still had strong demand for U.S. soybeans. Meal futures open high to climb on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 10-30 CNY/tonne to 2,840-2,980 CNY/tonne in coastal regions, in tepid trade. (Tianjin 2980, Shandong 2895-2910, Jiangsu 2850-2870, Dongguan 2840-2860, and Guangxi 2860-2880.) Rises in U.S. soybean prices have also increased the import cost. Besides, China’s breeding sectors have been in a recovery and domestic crushers still have many outstanding contracts, which will also limit the decline in meal prices. Hence, domestic millers are supporting prices, which is bullish to meal market. However, domestic soybean crush stays stubbornly high due to huge soybean imports, and soybean meal has been in tepid trade and slow deliveries for weeks, so soybean meal stocks have also been increasing in coastal regions. Domestic millers have to quicken up deliveries to ease swelling inventories, which limits rises in meal prices. Overall, soybean meal market will keep strong and fluctuate in the short term under the support of rising U.S. soybean prices, but its mid-term trend still remains to be seen due to looming pressure in late September with the sales of U.S. soybeans. Buyers are suggested to buy dips for appropriate stocks and not to chase after excessively high prices.

 

Imported rapeseed meal: U.S. soybean futures rose sharply on Thursday on China’s brisk demand and lower-than-expected yields result from dryness across the crop area. And meal futures in China today move higher after opening gains. Rapeseed meal price in coastal regions settles up 10-20 CNY/tonne at 2,250-2,350 CNY/tonne, seeing a light trading. Besides, rapeseed crush still stays at low levels due to limited rapeseed imports amid tensions between China and Canada. And oil mills have many contracts remain to be fulfilled as livestock breeding is recovering gradually, which may support meals prices. But soybean crush remains super high as soybean arrival at ports is huge in quantity, so soybean meal inventory in coastal regions continues rising. This could curb price rises of rapeseed meal. Therefore, short-term rapeseed meal price will probably fluctuate to stay strong (Only for reference).

 

Imported fishmeal: Imported fishmeal prices are stable with a partial decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,100 CNY/tonne, down 100 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 10,500-10,600 CNY/tonne, down 100 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 11,400-11,500 CNY/tonne, down100 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 11,800-12,000 CNY/tonne, down 100 CNY/tonne. More and more fresh fishmeal cargoes are arriving at domestic ports and are of lower cost, while the demand is not as good as expected and tend to reduce in northern markets. With worries about the market outlook, many traders are rushing to lock profits. Hence, domestic fishmeal prices are going weak.

 

Stocks at ports: Huangpu 48,000 tonnes, Fuzhou 14,000 tonnes, Shanghai 30,000 tonnes, Tianjin 1,000 tonnes, Dalian 7,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports.

 

FOB quotes from foreign markets today: Sept/Oct shipments are quoted at 1,220 USD/tonne for Peruvian Standard with 65% protein content and at 1,450 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 stay stable and drop by 100 CNY/tonne in several regions today. Soybean crush maintain high levels as soybean arrival at ports is huge in quantity. Soybean meal stocks in coastal regions increase consecutively. In this case, some plants are faced with over stock, which hits meals prices. Besides, the demand for cottonseed meal is reduced as feed mills adjust the feed formula due to its lower cost performance compared to soybean meal. Consequently, cottonseed oil trading gets lighter, depressing cottonseed meal price. But cottonseed is pricey, pushing up the cost. Accordingly, factories have intention to prop up price. Meal futures on Dalian Commodity Exchange today extend the opening gains, and spot soybean meal in coastal regions grows by 10-30 CNY/tonne, bringing cottonseed meal market some bullish support. It is predicted that cottonseed meal market may relatively remain flat in the near term.

 

(USD $1=CNY ¥6.89)