Today (Dec 31), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures closed further higher on Wednesday on robust U.S soybean exports and on continued dry weather in South America that could affect the supply. Meal futures open high and rise on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 50-100 CNY to 3,300-3,450 CNY/tonne in coastal regions, attracting some low-level purchases. (Tianjin 3450, Shandong 3340-3430, Jiangsu 3345-3390, Dongguan 3300-3350, and Guangxi 3320-3370.)

U.S. soybean futures broke the $13 level to hit a six-and-a-half-year high, so import cost remains stubbornly high. Gross margins for U.S. Gulf soybeans for Dec-Feb shipment are 14-117 CNY/tonne on Dalian at present, and if deducting 150-180 CNY/tonne of processing fee, net crush margins are still at loss. Oil mills have strong sentiment to raise prices, thus bolstering meal prices. However, soybean processors in Shandong Province have almost resumed production, which will help increase the supply and lift delivery restrictions. Moreover, 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. But U.S. dollar index keeps falling to below 90, which is bullish to commodity market. The market is putting focus on sharp rises in U.S. soybean futures now, so short-term soybean meal prices will probably keep strengthening.

Imported rapeseed meal: U.S. soybean futures ended higher overnight on strong export and potential tight supply due to prolonged dry weather in South America. Meal futures extend gains after high opens on China’s exchanges today. Spot rapeseed meal is offered at 2,660-2,730 CNY/tonne in coastal China today, an advance of 20-40 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. Soymeal price go strengthening, which also boosts rapeseed meal price. Nevertheless, aquaculture has basically ceased, and poultry stocks are low attributed to substantial losses in breeding margins, so feed consumption slows down. Moreover, hog capacity slows down on account of intensive hog slaughter ahead of New Year. In this case, rapeseed meal is still in subdued trade, leading to a rise in its inventory. Dominated by high cost brought by elevated US soybean prices, it is predicted that short-term rapeseed meal price will still fluctuate to stay strong.

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. Fishmeal stocks are at low levels at ports now, so traders still have sentiment to prop up 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 5,700 tonnes, Tianjin 600 tonnes, Shanghai 18,400 tonnes, Huangpu 54,600 tonnes, Fuzhou 11,600 tonnes, Fangchenggang 1,050 tonnes and 2,250 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.

Cottonseed meal: Cottonseed meal prices further increase by 50-100 CNY/tonne in several regions of China today. U.S. soybean futures closed up overnight on strong export and as soybean supply in South America may be impacted by prolonged dry condition there. Meal futures gain momentum after high opens on China’s Dalian Commodity Exchange today. And spot soybean meal rises by 50-100 CNY/tonne in coastal regions. Net crush margins for soybean futures have been negative as the cost of importing soybean remains high. In this case, soyoil mills have intention to lift prices, giving a boost to soybean meal price. 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. And soybean meal is in subdued trade the whole time after a price hike. Moreover, cottonseed meal market is also in thin trade. Driven by high cost, cottonseed meal market is likely to keep strengthening in a short term.

(USD $1=CNY ¥6.52)