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

Soybean meal: The market was concerned about yield loss in South American soybeans as Argentine crops were in slow planting and in poor condition, coupled with strong export demand for U.S. soybeans, so U.S. soybean futures closed sharply higher on Tuesday. Meal futures open high and rise on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 50-80 CNY to 3,220-3,370 CNY/tonne in coastal regions, in thin trade. (Tianjin 3370, Shandong 3290-3350, Jiangsu 3260-3310, Dongguan 3220-3260, and Guangxi 3250-3270.)

Net crush margins for soybeans on Dalian are still at loss under high import cost. Soybean processors in Rizhao are still limiting the production albeit the resumption, so the overall soybean meal supply is tight in Shandong Province, elevating the delivery pace in Jiangsu Province. These are bolstering meal prices. But aquaculture has been off-season in winter, and poultry stocks are low due to previous breeding loss, coupled with a cluster year-end sales of pigs and a slow recovery in hog breeding capacity, so downstream buyers become cautious and soybean meal market stays in thin trade, especially under high-level price. In addition, CBOT soybean futures edge down today after the CIARA and worker unions in Argentina have hammered out a deal to end the strike, which is also bearish to meal market in China. But high import cost brought by a sharp rise in U.S. soybean futures is leading the market, so soybean meal prices will probably fluctuate to keep a strengthening trend.

Imported rapeseed meal: The latest weather forecast calls for less-than-anticipated rainfall in South America in the weekend. Drier conditions in Argentina cause soybean planting to be in slow progress and crop development is poor, raising market concerns over a reduction of soybean production in South America. Moreover, US soybean supply will probably get tightened on strong export demand. These have sent US soybean prices skyrocketing and soy futures ended sharply higher overnight on CBOT. Meal futures extend gains after high opens on China’s exchanges today. Spot rapeseed meal is offered at 2,620-2,690 CNY/tonne in coastal China today, an advance of 70-90 CNY/tonne, in tepid trade.

Crush margins for soybean futures have been negative as the cost of importing soybean remains high. Additionally, soybean meal trading in Jiangsu goes better due to short supply in Shandong, so oil mill tend to lift prices. Soymeal price go strengthening, which also boosts rapeseed meal price. Nevertheless, aquaculture has basically ceased, and poultry stocks are low attributed to sustained losses in breeding margins, so feed consumption slows down. Moreover, soybean futures drop on foreign exchanges on speculations that Argentine workers strike is coming to an end, affecting market sentiment. These are bearish for rapeseed meal market. It is predicted that short-term rapeseed meal price will still fluctuate at the high level.

Imported fishmeal: Imported fishmeal prices are stable today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,000-10,200 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 10,400-10,700 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 11,000-11,100 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 11,500-11,600 CNY/tonne. Small port stocks and the influence of a possible delay in new fishmeal shipment and arrivals are supportive of fishmeal prices at domestic ports, so domestic traders still have sentiment to raise prices. But the demand for fishmeal is subdued as aquaculture turns slack in winter and the recovery in hog herd is limited now, so feed manufacturers tend to take hand-to-mouth buying at present, which is capping the upward space in domestic fishmeal market. Overall, domestic fishmeal prices are expected to steady with slight adjustments in the near term.

Stocks at ports: Dalian 6,020 tonnes, Tianjin 600 tonnes, Shanghai 18,950 tonnes, Huangpu 55,250 tonnes, Fuzhou 11,420 tonnes, Fangchenggang 1,100 tonnes and 2,200 tonnes at other ports.

FOB quotes from foreign markets today: Dec/Jan shipments are quoted at 1,310 USD/tonne for Peruvian Standard with 65% protein content and at 1,530 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted steadily at 1,370 USD/tonne, and super with 68% protein content at 1,600 USD/tonne.

Fish catches in north-central Peru: As of Dec 26 (local time), fish catches in the second season of 2020 total 1,744,716 tonnes, taking up 62.76% of the total quota of 2.78 mln tonnes and with the fishing average at around 39,000 tonnes per day and 1,035,284 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 30th.)

Cottonseed meal: Cottonseed meal prices increase by 30-50 CNY/tonne in some regions of China today. Drier than normal conditions in Argentina slowed the soybean planting and crop development, raising market concerns over a reduction of soybean production in South America. This news along with robust demand for US soybean export sent its prices skyrocketing. And soybean futures jumped much higher overnight on CBOT. Meal futures extend rally after opening gains on China’s Dalian Commodity Exchange today. And spot soybean meal rises by 50-80 CNY/tonne in coastal regions.

Crush margins for soybean futures have been negative as the cost of importing soybean remains high. Besides, soy crushing mills in Rizhao still limit production despite the operation resume, tightening soybean meal supply in Shandong and boosting its prices. On the other side, cottonseed crush remains low due to its high cost, which pushes cottonseed meal price up as well. However, aquaculture has basically ceased, and hog capacity recovery also slows due to intensive hog slaughter. Consequently, feed consumption has fallen, leading to a subdued trading in soybean meal. These have caused cottonseed meal market to be in thin trade. Therefore, cottonseed meal market is likely to fluctuate to stay strong in a short term.

(USD $1=CNY ¥6.53)