Today (Jan 12), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures fell on Monday on favorable rains in South America during the weekend and as traders squared positions ahead of the USDA soybean supply and demand report for January. Meal futures keep range-bound at high levels on China’s Dalian Commodity Exchange today. Spot soybean meal prices settle at 3,690-3,960 CNY/tonne in coastal regions, fluctuating by 20-40 CNY/tonne from yesterday. (Tianjin 3960, Shandong 3890-3930, Jiangsu 3875-3900, Dongguan 3720-3730, and Guangxi 3690-3800.)

Net crush margins for soybeans on Dalian are still at loss due to high import cost. Mid-and-downstream buyers are stocking up soybean meal in advance for Spring Festival, for fear that severe coronavirus pandemic in northern China could affect logistics. A surge in demand is tightening up soybean meal supply in northern markets, whilst local mills are limiting the delivery, leading to a delay in loading and a long line of trucks at mill gates. And some millers in southern markets also take the opportunity to ship soybean meal to northern regions. Meanwhile, domestic soybean crush were staying at around 1.70 mln tonnes for two consecutive weeks, so that soybean meal inventory is also notably reducing. Spot soybean meal market is thus stronger than futures. But downstream buyers are getting cautious as prices climb to current high levels, so soybean meal market is likely to go into weaker trade. 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 it is still necessary to prevent risks of short-term fluctuations in the wake of sharp rises. Participants can keep an eye on the USDA report due on Tuesday.

Rapeseed meal: U.S. soybean futures settled lower on Monday on more than expected precipitation during the weekend in South America and as traders adjusted positions before USDA Jan supply and demand report was released. Meal futures post further gains but slow the rises on China’s exchanges. Spot rapeseed meal is offered at 2,820-2,910 CNY/tonne in coastal China today, a fluctuation of 10-20 CNY/tonne, in tepid trade. Net crush margins for soybean futures have been negative as the cost of importing soybean remains high in China. Besides, traders have begun stocking up ahead of the Lunar New Year due to intensified COVID-19 pandemic in North China. And soybean meal stocks have declined by 6% to 800,000 tonnes, so that soybean meal price keeps strong, boosting rapeseed meal price. But soybean crushing mills may pick up the operation rate over the next two weeks due to adequate supplies. Furthermore, 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 Chinese New Year. In this case, feed consumption slows down, slackening demand for meals. But the high cost brought by surge in US soybean prices has offset negative factors on fundamentals, so that short-term rapeseed meal market will maintain an uptrend following soybean meal.

Cottonseed meal: Cottonseed meal prices sharply rise by 100-350 CNY/tonne in several regions of China today. 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. However, soybean crush has set a low level of 1.7 mln tonnes for two weeks in a row. These have together given a boost to soybean meal price. Additionally, cottonseed cost remains high, which buoys cottonseed meal price as well. But aquaculture has basically ceased, and hog capacity recovery has slowed, leading cottonseed meal to be in subdued trade. Driven by high cost due to the strength on U.S. soybean prices, short-term cottonseed meal market is projected to maintain a strong uptrend.

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 5,000 tonnes, Tianjin 450 tonnes, Shanghai 12,400 tonnes, Huangpu 46,760 tonnes, Fuzhou 12,500 tonnes, Fangchenggang 1,020 tonnes and 3,200 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.

(USD $1=CNY ¥6.48)