Today (Dec 22), the market for meals in China is shown as follows:

Soybean meal: More than 100 grain ships were kept from loading in Argentina as a wage strike by grain inspectors and oilseed workers stretched into its second week, coupled with concerns over weather in South America and strong U.S. soybean exports, so U.S. soybean futures continued sharp gains on Monday. Meal futures extend strong rises on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 30-80 CNY to 3,180-3,320 CNY/tonne in coastal regions. Dalian meal futures narrow down gains in toward noon session, which affects the purchasing enthusiasm, so the trade is tepid. (Tianjin 3320, Shandong 3285-3340, Jiangsu 3215-3340, Dongguan 3180-3200, and Guangxi 3210-3260.)

Net crushing margins for soybeans on Dalian remain poor due to high import cost, and all oil mills in Rizhao are still in downtime subject to the environmental protection and are cutting down the delivery. Soybean oil is in thin trade due to sustained rises in price, so oil mills have strong sentiment to raise meal prices. These combine to buoy meal prices. However, oil mills across China are maintaining high operation rates under adequate soybean supplies as imports remain enormous. Meanwhile, aquaculture has come to a standstill, and the demand for poultry feed also sees a sharp decline due to loss in breeding. And downstream buyers become cautious in soybean meal market after sharp rises, so the market is fallow trade this week. Besides, oil mills in Guangdong and Guangxi are bearing meal inventory pressure and have been quickening up deliveries, so soybean meal prices see smaller rises in southern market than in the north. On the whole, cost factors may push soybean meal prices to follow futures to fluctuate and rise, but due to a lack of bullish fundamentals and as stock markets fell broadly after U.K coronavirus mutation prompted countries across Europe to announce strict lockdown measures, the agricultural market may get affected. Buyers with adequate stocks can stay on the sidelines.

Imported rapeseed meal: U.S. soybean futures sharply rose on Monday on the wave of strikes by Argentine workers and as prolonged dryness depressed global supply outlook. Meal futures stage strong performance on China’s exchanges today. Spot rapeseed meal is offered at 2,570-2,660 CNY/tonne in coastal China today, an increase of 20-80 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. And oil plants intend to lift price as soybean meal deliveries are limited, boosting rapeseed meal price. But China’s soybean supplies are adequate due to enormous soybean cargoes arrivals at ports. To guarantee oils supply, domestic crushers continue picking up operation rates. In this case, soybean crush last week has risen to 2 mln tonnes. Moreover, aquaculture has basically ceased, and there are sustained losses in breeding margins for poultry. Plus, the recovery of hog capacity also slows down due to intensive hog slaughter before New Year’s Day. These have depressed market mentality, seeing subdued trading after price hike. Overall, short-term rapeseed meal market is projected to fluctuate to rebound underpinned by high price of feedstock.

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. Small port stocks and the influence of a possible delay in new fishmeal shipment and arrivals are supportive of fishmeal prices at domestic ports. But the demand for fishmeal is subdued as aquaculture turns slack in winter, 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 6,100 tonnes, Tianjin 680 tonnes, Shanghai 23,650 tonnes, Huangpu 59,000 tonnes, Fuzhou 10,350 tonnes, Fangchenggang 1,300 tonnes and 1,400 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 17 (local time), fish catches in the second season of 2020 total 1,458,218 tonnes, taking up 52.45% of the total quota of 2.78 mln tonnes and with the fishing average at around 40,000 tonnes per day and 1,321,782 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 22nd.)

Cottonseed meal: Cottonseed meal prices in part increase by 40-100 CNY/tonne in China today. U.S. soybean futures skyrocketed on strong export and concerns over weather condition in South America. Meal futures also post wild gains on China’s Dalian Commodity Exchange today. Spot soybean meal up by 30-80 CNY/tonne in coastal regions of China. Crush margins for soybean futures have been negative as the cost of importing soybean remains high. And soybean crushing mills in Rizhao have been suspending operation due to environmental protection warning. These have together boosted meal price. Likewise, cottonseed cost also maintains a high level at present, which is supporting cottonseed meal prices. However, aquaculture has basically ceased, and market sentiment is depressed as there are sustained losses in breeding margins for poultry. Add to that, cottonseed meal market is also in thin trade, which is also bearish to the market itself. Driven by a surge in soybean meal, cottonseed meal is likely to fluctuate to rebound in a short term.

(USD $1=CNY ¥6.54)