Today (Jan 21), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures were further lower on Wednesday, and meal futures move down after high opens on China’s Dalian Commodity Exchange today. Spot soybean meal prices are mixed partially by 10-20 CNY at 3,630-4,020 CNY/tonne in coastal regions with better trade at low levels. (Tianjin 4020, Shandong 3900-3920, Jiangsu 3740-3920, Dongguan 3630-3660, and Guangxi 3650-3740.)

Chinese crushers may pick up weekly soybean crush to over 2 mln tonnes in the next two weeks, whilst downstream buyers are cautious in soybean meal market due to current high prices. And domestic feed manufacturers have started using wheat, paddy and barley due to strong corn prices, and high protein in wheat will also lead to a slight reduction in soybean meal use. These are negative to soybean meal prices. However, some domestic millers have sold out spot soybean meal for January, and feed manufacturers were busy making replenishment when meal prices were rising in the past few weeks, so soybean meal inventory has shrunk to a relatively low level. In addition, due to heavy air pollution, processors in Rizhao in Shandong Province have again suspended production. Hence, domestic processors and dealers are supporting meal prices. In the short term, soybean meal will slow down declines and may rise moderately. Buyers are suggested to make appropriate replenishment if with inadequate stocks, but not to chase after excessively higher prices.

Rapeseed meal: U.S. soybean futures further dropped on Wednesday. Meal futures on China’s exchanges decline today but still stay above the previous close. Spot rapeseed meal is offered at 2,740-2,850 CNY/tonne in coastal China today, an advance of 10-20 CNY/tonne, in tepid trade. Net crush margins for soybean futures have been negative due to the high cost of importing soybean. Besides, traders begin the stockpiling in advance amid the severe coronavirus pandemic in North area. Consequently, soybean meal stocks rapidly fall to a relatively low level, boosting rapeseed meal prices. Rapeseed meal may get to rebound after continuous declines. With recent adequate supply, soybean crush will likely get back to more than 2 mln tonnes this week. Furthermore, aquaculture has basically ceased, and hog capacity recovery slows due to a large amount of hog slaughter. In this case, feed consumption slows down, slackening demand for meals. Rapeseed meal stocks still stay at the high level, which may tentatively limit upside of rapeseed meal market.

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. Fishmeal stocks have been reducing in Peru, so that local manufacturers are propping up prices. And fishmeal stocks also continue decreasing at domestic ports in the short run. Hence, domestic traders have sentiment to support and lift 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 3,500 tonnes, Tianjin 420 tonnes, Shanghai 7,130 tonnes, Huangpu 41,200 tonnes, Fuzhou 12,600 tonnes, Fangchenggang 1,050 tonnes and 3,400 tonnes at other ports.

FOB quotes from foreign markets today: Jan/Feb shipments are quoted steadily at 1,380 USD/tonne for Peruvian Standard with 65% protein content and at 1,600 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 18 (local time), fish catches in the second season of 2020 total 2,384,132 tonnes, taking up 85.76% of the total quota of 2.78 mln tonnes and with the fishing average at around 35,000 tonnes per day and 395,868 tonnes remaining available. (Imarpe revised its fish catches data for Nov 16th and 22nd.)

Cottonseed meal: Cottonseed meal prices stay stable with a partial decrease of 20-100 CNY/tonne in China today. U.S. soybean futures extended losses in overnight trade. Soybean crush will likely surpass 2 mln tonnes in the coming two weeks amid huge arrivals at ports. But downstream buyers become cautious after soybean meal prices rise to current level, which is bearish for meals prices. Moreover, aquaculture has basically ceased, and hog capacity recovery has slowed, seeing a subdued trade of cottonseed meal. This causes cottonseed meal price to decline. Meal futures shift to be higher after low opens today, and soybean meal could stop falling and post a modest rally. Additionally, the cost of importing soybean stays high, and cottonseed cost also remains high, which supports cottonseed meal price as well. Therefore, cottonseed meal market is projected to fluctuate narrowly at the high level in the near term.

(USD $1=CNY ¥6.47)