Today (Jan 13), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures soared on a bullish USDA monthly report and continued dryness in South America, and meal futures also surge on China’s Dalian Commodity Exchange today. Spot soybean meal prices settle up 120-210 CNY at 3,830-4,160 CNY/tonne in coastal regions. As buyers have mostly made replenishment, the market is not in strong trade in the wake of further sharp rises today. (Tianjin 4160, Shandong 4060-4100, Jiangsu 3995-4080, Dongguan 3830-3900, and Guangxi 3880-4100.)

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 the coronavirus pandemic could affect logistics. A surge in demand is tightening up soybean meal supply in northern markets, whilst local mills are limiting the delivery and southern millers are shipping meal cargoes to northern markets. And as soybean crush stayed at low levels in the past two weeks, domestic soybean meal stocks post a sharp decline and some millers have completed spot sales for January. Spot basis keeps widening, bolstering a sharp rise in spot soybean meal prices. Supported by sustained 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 in the short run.

Imported rapeseed meal: U.S. soybean futures sharply rose on Tuesday on bullish monthly USDA report and prolonged dry condition in South America. Meal futures also surge on China’s domestic exchanges. Spot rapeseed meal is offered at 2,950-3,050 CNY/tonne in coastal China today, an increase of 120-140 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 fallen significantly, so that soybean meal price keeps strong, boosting rapeseed meal price. Furthermore, aquaculture has basically ceased, and poultry stocks are low attributed to substantial losses in breeding margins previously. In this case, feed consumption slows down, slackening demand for meals. Thus, rapeseed meal inventories continue rising. But the high cost brought by the strength on US soybean prices 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 4,700 tonnes, Tianjin 460 tonnes, Shanghai 12,000 tonnes, Huangpu 46,300 tonnes, Fuzhou 12,600 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 10 (local time), fish catches in the second season of 2020 total 2,218,790 tonnes, taking up 79.81% of the total quota of 2.78 mln tonnes and with the fishing average at around 37,000 tonnes per day and 561,210 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 31st.)

Cottonseed meal: Cottonseed meal prices in part rise by 50-200 CNY/tonne in China today. U.S. soybean futures soared on Tuesday on bullish USDA report and prolonged dryness in South America. Meal futures also jump on China’s Dalian Commodity Exchange. Spot soybean meal increases by 120-210 CNY/tonne in coastal regions. Net crush margins for soybean futures have been negative as the cost of importing soybean stays high. Besides, downstream enterprises are afraid that logistics would be affected by the resurgence of COVID-19, 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 for two weeks in a row, leading to a distinct decline in soybean meal stocks. Many oil plants have sold January spot contract, which causes spot soybean meal price to surge. Additionally, cottonseed cost remains high, which buoys cottonseed meal price as well. It is predicted that short-term cottonseed meal market will maintain a strong uptrend.

(USD $1=CNY ¥6.46)