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Daily Review on Meal Market in China--12/16/2020

2020-12-16 www.cofeed.com

Today (Dec 16), the market for meals in China is shown as follows:

 

Soybean meal: U.S. soybean futures rallied on Tuesday, bolstered by a tight U.S. soybean supply outlook as the crush went higher than the forecast and also by uncertain weather in South America. Meal futures open high and extend gains on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 20-50 CNY to 3,010-3,130 CNY/tonne in coastal regions in thin trade. (Tianjin 3130, Shandong 3075-3110, Jiangsu 3030-3070, Dongguan 3000-3020, and Guangxi 3070-3100.)

 

Net crush margins for soybeans on Dalian have been at loss due to high import cost, so oil mills are propping up prices, coupled with technical bounces on Dalian, which together bolsters meal prices today. But domestic soybean crush will pick up again under adequate soybean supply. On the demand side, poultry feed demand sees a huge decline due to sustained breeding loss, so that feed mills have also cut down soybean meal usage and soybean meal shipment is affected. Soybean meal stocks began to increase again last week, with a rise of 5.7% to 880,000 tonnes. Oil mills keep urging to quicken up deliveries, which is curbing gains in meal prices. In the short term, soybean meal prices will follow futures to fluctuate frequently.

 

Imported rapeseed meal: U.S. soybean crush for November recorded the third highest in history, and soybean meal export soared to a nearly eight-year high. U.S soybean futures sharply rose overnight on the news and uncertain soybean crop outlook in South America. Meal futures stage further gains with high opens on China’s exchanges today. Spot rapeseed meal is offered at 2,390-2,470 CNY/tonne in coastal China today, an increase of 40-60 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 bolsters rapeseed meal price. But China’s soybean supplies are adequate due to enormous soybean cargoes arrivals at ports. Moreover, aquaculture has turned slack seasonally and there is a sharp decline in poultry feed consumption in December due to sustain losses in breeding margins for poultry. Likewise, the demand for hog feed is also faltering. Soybean meal inventories rise again, which may limit uptrend of rapeseed meal price. 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. Domestic port traders bear no pressure in holding stocks under reducing fishmeal cargoes to domestic ports and a sustained decline in domestic port fishmeal stocks. 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 6,000 tonnes, Tianjin 650 tonnes, Shanghai 25,300 tonnes, Huangpu 61,240 tonnes, Fuzhou 10,200 tonnes, Fangchenggang 1,050 tonnes and 2,000 tonnes at other ports.

 

FOB quotes from foreign markets today: Dec/Jan shipments are quoted lower by 50 USD 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 14 (local time), fish catches in the second season of 2020 total 1,322,364 tonnes, taking up 47.57% of the total quota of 2.78 mln tonnes and with the fishing average at around 40,000 tonnes per day and 1,457,636 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 22nd.)

 

Cottonseed meal: Cottonseed meal prices stay stable in China today. Domestic crushers pick up operation rates as soybeans are in ample supply amid huge imports. However, there is a sharp decline in poultry feed consumption due to sustain losses in breeding margins for poultry, so that soybean meal usage in feed mills drops markedly. In this case, soybean meal has been in slow delivery and its inventory rises to 880,000 tonnes in coastal regions with an increase of 5.7% from the previous week. Many crushers still urge buyers to take delivery, curbing meal price. Add to that, cottonseed meal market is also in thin trade, which is also bearish to the market itself. But meal futures extend opening gains on China’s Dalian Commodity Exchange today. Spot soybean meal rises by 20-50 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 go up in stability.

 

(USD $1=CNY ¥6.54)