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

Soybean meal: The USDA was expected to revise down 2020/21 U.S. soybean ending stocks from 175 mln bushels to 139 mln bushels in its monthly supply/demand report due this Tuesday. CBOT soybean futures thus rallied last Friday on a tightening global supply prospect and on concerns over weather in South America. Meal futures open higher and extend sharp gains on China’s Dalian Commodity Exchange today. Spot soybean meal prices settle at 3,680-3,950 CNY/tonne in coastal regions, up 220-290 CNY/tonne from last Friday. (Tianjin 3950, Shandong 3850-3900, Jiangsu 3860-3900, Dongguan 3700-3750, and Guangxi 3680-3700.)

Net crush margins for soybeans on Dalian are still at loss due to high import cost. The coronavirus pandemic is severe in northern China now, so that mid-and-downstream buyers are stocking up soybean meal in advance for Spring Festival for fear of slow or interrupted logistics. Soybean meal market is in tight supply in northern markets due to an unexpected sharp rise in demand and as mills are stalling sales, so that customers from northeastern regions are seeking for products in north China and Shandong Province and those from Hebei Province are taking delivery from east China and Jiangsu Province. Some millers in southern China are also shipping their soybean meal cargoes to northern markets. Meanwhile, domestic soybean crush were staying at around 1.70 mln tonnes for two consecutive weeks. All these combine to bolster soybean meal prices to rise drastically across the country, of which northern markets have seen a bigger rise than southern ones, with spot prices getting near to 4,000 CNY/tonne in north China. Supported by sharp gains in U.S. soybeans and as domestic buyers are stocking up for the festival, soybean meal market in China is predicted to maintain a relatively strong trend. But now that soybean meal prices have rallied to such a high level, it is necessary to strengthen risk prevention at high-level prices and take good control of positions.

Imported rapeseed meal: Market expects that 2020/21 U.S. soybean ending stocks will be revised from 175 mln bushels to 139 mln bushels on Tuesday USDA report. Soybean futures settled sharply higher on CBOT last Friday on tightening soybean supply worldwide and concerns over dryness in South America. Meal futures post drastic gains with high opens on China’s exchanges. Spot rapeseed meal is offered at 2,800-2,890 CNY/tonne in coastal China today, an advance of 80-90 CNY/tonne, in tepid trade. Net crush margins for soybean futures have been negative as the cost of importing soybean remains high in China. And soybean crush has declined by 1.42% to 1.68 mln tonnes. Besides, aquaculture has basically ceased, and poultry stocks are low attributed to substantial losses in breeding margins previously. Also, hog capacity recovery becomes slower due to intensive slaughter ahead of the Lunar New Year. In this case, feed consumption slows down, slackening demand for meals. Rapeseed meal stocks increase by 35% to 460,000 tonnes in coastal regions. But the high cost brought by surge in US soybean has offset negative factors on fundamentals, so that short-term rapeseed meal market will maintain an uptrend following soybean meal.

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 5,030 tonnes, Tianjin 490 tonnes, Shanghai 12,700 tonnes, Huangpu 47,600 tonnes, Fuzhou 12,400 tonnes, Fangchenggang 1,000 tonnes and 3,100 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. 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 6 (local time), fish catches in the second season of 2020 total 2,110,134 tonnes, taking up 75.9% of the total quota of 2.78 mln tonnes and with the fishing average at around 38,000 tonnes per day and 669,866 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 31st.)

Cottonseed meal: Cottonseed meal prices sharply rise by 50-200 CNY/tonne in China today. U.S. soybean futures jumped higher last Friday on tightening global soybean supply and concerns over dry condition in South America. Meal futures post wild gains after opening high on China’s Dalian Commodity Exchange. And spot soybean meal surges 200-290 CNY/tonne in coastal regions compared to last Friday. Net crush margins for soybean futures have been negative as the cost of importing soybean stays high. Besides, downstream enterprises are worried about logistics as the COVID-19 pandemic gets worse in North China, so they have started stocking up ahead of the Lunar New Year. With an unexpected increase in demand, soyoil mills are reluctant to sell their stocks. These have together given a boost to meal price nationwide. Additionally, cottonseed cost remains high, which buoys cottonseed meal price as well. It is predicted that short-term cottonseed meal market will maintain an uptrend.

(USD $1=CNY ¥6.48)