Today (Dec 11), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures closed lower on Thursday, as the cuts in soybean stocks by the USDA report were smaller than the market expectation, in addition to improving rains in portions of South America and smaller export demand for U.S. soybeans. Meal futures open low and decline on China’s Dalian Commodity Exchange today. Spot soybean meal prices go down 10-40 CNY to 2,980-3,100 CNY/tonne in coastal regions in weaker trade. (Tianjin 3100, Shandong 3035-3070, Jiangsu 2985-3050, Dongguan 2980-3010, and Guangxi 3040-3070.)

Domestic crushers will pick up operation rates again in these two weeks owing to substantial soybean arrivals at ports and in order to guarantee oil supply. Meanwhile, aquaculture has been in slack season, and poultry feed production fell by 7.6% in November as there is a decline in layer stocks due to sustained loss. The delivery of soybean meal is thus slower and it will take some time to digest inventory pressure. But 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. Moreover, hog sector is still in a recovery across the country, which will help limit the decline in meal prices. The USDA report fails to surprise the market, and in the short run, soybean meal market in China is predicted to follow futures to keep range-bound, and buyers can stay on the sidelines.

Imported rapeseed meal: U.S soybean futures closed down on slack demand for exports, lower-than-expected revision in soybean stocks by USDA report as well as improved rainfall in parts of South America. Meal futures also open low and continue losses on domestic exchanges today. Spot rapeseed meal is offered at 2,360-2,450 CNY/tonne in coastal China today, a decrease of 10-30 CNY/tonne, in tepid trade. 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 depress rapeseed meal prices. However, China’s rapeseed imports have been affected by the stalemate between Beijing and Ottawa, so its rapeseed crush also remains small, which limits price declines of rapeseed meal. Overall, rapeseed meal market is predicted to keep range-bound in a short term.

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 6,700 tonnes, Tianjin 600 tonnes, Shanghai 28,700 tonnes, Huangpu 63,000 tonnes, Fuzhou 11,220 tonnes, Fangchenggang 1,100 tonnes and 2,500 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.

Cottonseed meal: Cottonseed meal prices stay stable with a partial decline of 50 CNY/tonne in China today. USDA report revised soybean stocks down, which was lower than market-expected. Rainfall improved in parts of South America and the demand for US soybean exports slowed down. In this case, U.S. soybean futures ended lower overnight. Meal futures edge down after opening fall on China’s Dalian Commodity Exchange today, and spot soybean meal drops by 10-40 CNY/tonne. 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. But 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. 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. 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 ¥6.54)