Today (Dec 10), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures rose on brisk short covering on Wednesday, as the USDA was expected to continue lowering its soybean stockpiles estimates in the report due Thursday. Meal futures open high and rise on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up by 10-30 CNY to 3,000-3,130 CNY/tonne in coastal regions, attracting some low-level purchases. (Tianjin 3130, Shandong 3060-3080, Jiangsu 3000-3050, Dongguan 3000-3030, and Guangxi 3050-3080.)

Soybean meal prices in China are supported by the cost side, as net crush margins for soybeans on Dalian have been at loss due to high import cost. But soybean meal delivery has been slower recently, for aquaculture has turned slack seasonally and there is a sharp decline in poultry feed consumption due to sustain losses in breeding margins for poultry and a decline in layer stocks. Worse still, domestic crushers will pick up operation rates again in the coming two weeks in order to guarantee oil supply. Hence, it will take some time to digest soybean meal stocks, which will be limiting rises in meal prices. In the short term, soybean meal may follow futures to keep range-bound. Participants can keep an eye on the USDA report tonight to see if it is bullish as expected. Buyers are suggested to make replenishment on dips to keep moderate inventories and remain cautious in chasing after high prices.

Rapeseed meal: U.S soybean futures rose on Wednesday due to an uncertain crop outlook in South America. Meal futures also open high and continue gains on domestic exchanges today. Spot rapeseed meal is offered at 2,390-2,450 CNY/tonne in coastal China today, an increase of 10-30 CNY/tonne, in tepid trade.

China’s rapeseed imports have been affected by the stalemate between Beijing and Ottawa, so its rapeseed crush also remains small, which supports meal prices. But China’s soybean supplies are adequate due to enormous soybean cargoes arriving at ports, while soybean meal demand is decreasing as aquaculture has turned slack seasonally and there is a sharp decline in poultry feed consumption due to sustain losses in breeding margins for poultry and a decline in layer stocks. This may limit the upward space for rapeseed meal prices. Overall, rapeseed meal market is predicted to keep range-bound.

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 10,900-11,100 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 11,400-11,500 CNY/tonne. Peruvian manufacturers are bullish about the market as they have presold more than half of their cargoes. And Peruvian authorities have also imposed fishing ban from time to time since the start of this fishing season, so that market insiders forecast that the 2.78-mln-tonne of fishing quota may not be fully completed. In addition, Chinese port traders also feel free in terms of stocks and have strong sentiment in propping up prices. However, domestic demand for fishmeal is decreasing in aquaculture as the weather gets cool, so that feed companies have little enthusiasm making purchases, which is constraining the market. Overall, domestic fishmeal prices are expected to steady with slight adjustments in the near term.

Stocks at ports: Dalian 7,020 tonnes, Tianjin 700 tonnes, Shanghai 29,100 tonnes, Huangpu 63,100 tonnes, Fuzhou 11,300 tonnes, Fangchenggang 1,050 tonnes and 2,800 tonnes at other ports.

FOB quotes from foreign markets today: Dec/Jan shipments are quoted steadily at 1,360 USD/tonne for Peruvian Standard with 65% protein content and at 1,580 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 7 (local time), fish catches in the second season of 2020 total 985,256 tonnes, taking up 35.44% of the total quota of 2.78 mln tonnes and with the fishing average at around 37,000 tonnes per day and 1,794,744 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 22nd.)

Cottonseed meal: Cottonseed meal prices stay stable with a partial decline of 50 CNY/tonne in China today. Soybean meal has been in slow delivery, as aquaculture has turned slack seasonally and there is a sharp decline in poultry feed consumption due to sustain losses in breeding margins for poultry and a decline in layer stocks. But as soybean arrivals at ports have been enormous and in order to guarantee oils supplies, domestic crushers will pick up operation rates in the next two weeks. Hence, it will take time to digest soybean meal stocks. Add to that, cottonseed meal market is also in thin trade, which is also  bearish to the market itself. However, U.S. soybean futures in overnight trade and meal futures also open high and extend gains on China’s Dalian Commodity Exchange today. And spot soybean meal also goes up 10-30 CNY/tonne. Besides, cottonseed cost also remains at a high level at present, which is supporting cottonseed meal prices. Overall, it is expected that short-term cottonseed meal market may fluctuate narrowly in stability.

(USD $1=CNY ¥6.55)