Today (Jan 7), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures further rose on Wednesday on worries about weather conditions in South America, but strong oils market is curbing on meal prices so that meal futures are lower than the previous close on China’s Dalian Commodity Exchange, albeit staying above the previous settlement. Spot soybean meal prices settle at 3,400-3,610 CNY/tonne in coastal regions, mostly up 20-50 CNY/tonne and a partial decline of 10-30 CNY. (Tianjin 3610, Shandong 3530-3570, Jiangsu 3495-3520, Dongguan 3380-3400, and Guangxi 3440-3470.)

Net crush margins for soybeans are still at loss on Dalian due to high import cost, and soybean meal market has been in brisk trade as buyers are stocking up for the Spring Festival, with the total volume up to 1.36 mln tonnes for the last three days. Hence, oil mills have strong sentiment to raise prices, which helps meal prices to rise. In consideration of continued sharp rises in U.S. soybean futures, soybean meal prices in China are predicted to maintain an uptrend in fluctuation on the push of cost side, but it is necessary to avoid risks of fluctuations in the wake of sharp gains.

Imported rapeseed meal: U.S. soybean futures rose overnight on concerns over dry conditions in South America. But investors are active in buying oil and selling meal as oils futures move strongly, which restricts meal price. Meal futures on China’s Exchanges are lower than previous closing price today, though up from previous settle price. Spot rapeseed meal is offered at 2,670-2,790 CNY/tonne in coastal China today, a fluctuation of 10-20 CNY/tonne, in tepid trade.

Soybean crushing mills will pick up the operation rate over the next two weeks on adequate supplies. Nevertheless, aquaculture has basically ceased, and poultry stocks are low attributed to substantial losses in breeding margins previously. In this case, feed consumption slows down, and the deliveries also become slowly. As a result, rapeseed crushing mills suspend the operation due to bloated inventory, weighing on rapeseed meal price. However, rapeseed crush remains low due to high cost of importing soybean and limited imports of rapeseed, which may buoy rapeseed meal market. It is predicted that short-term rapeseed meal price will fluctuate at high levels.

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. Domestic fishmeal stocks keep falling at present so that traders have some sentiment to prop up or raise prices. But the demand for fishmeal is subdued as aquaculture turns slack in winter and the recovery in hog herd is limited now, 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 5,100 tonnes, Tianjin 570 tonnes, Shanghai 14700 tonnes, Huangpu 51400 tonnes, Fuzhou 11800 tonnes, Fangchenggang 1,030 tonnes and 2,500 tonnes at other ports.

FOB quotes from foreign markets today: Jan/Feb shipments are quoted at 1,340 USD/tonne for Peruvian Standard with 65% protein content and at 1,560 USD/tonne for Peruvian super with 68% protein content, both with a rise of 30 USD/tonne. 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 Jan 5 (local time), fish catches in the second season of 2020 total 2,078,787 tonnes, taking up 74.78% of the total quota of 2.78 mln tonnes and with the fishing average at around 38,000 tonnes per day and 701,213 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 31st.)

Cottonseed meal: Cottonseed meal prices stay stable with a partial increase of 50-100 CNY/tonne in China today. U.S. soybean futures continued rising on Wednesday on concerns over dry conditions in South America. But investors are active in buying oil and selling meal as oils futures move strongly, which restricts meal price. Meal futures on China’s Dalian Commodity Exchange are lower than previous closing price today, though up from previous settle price. And spot soybean meal mostly increases by 20-50 CNY/tonne in coastal regions.

Net crush margins for soybean futures have been negative as the cost of importing soybean stays high. And traders have begun stocking up ahead of the Lunar New Year, so soyoil mills have intention to lift prices. These have together given a boost to soybean meal price. Besides, cottonseed crush remains low due to its high cost, which buoys cottonseed meal price as well. In addition, aquaculture has basically ceased, and hog capacity recovery also slows. Moreover, cottonseed meal market is also in thin trade. Driven by high cost, the overall cottonseed meal market still keeps strengthening.

(USD $1=CNY ¥6.46)