Today (Feb 24), the market for meals in China is shown as follows:

Soybean meal: U.S. soybean futures surged on Tuesday, as a slow soybean harvest in Brazil would bolster the export demand for U.S. soybeans and thus further tighten its supplies. Meal futures open high and rise but actually stay below the previous close on China’s Dalian Commodity Exchange today. Spot soybean meal prices settle at 3,730-3,830 CNY/tonne, fluctuating by 20-40 CNY and attracting some low-level purchases. (Tianjin 3790, Shandong 3750-3790, Jiangsu 3740-3760, Dongguan 3730-3750, and Guangxi 3820-3830.)  

China’s monthly soybean imports may only be 6.2 mln tonnes on average in February and March and are distributed unevenly, so that some mills may have to suspend crush for a lack of beans. And some domestic processors have sold out February soybean meal contracts and are selling March contracts at a brisk pace. Moreover, crush margins for imported U.S. soybeans are at loss after U.S. soybean futures rose sharply. Domestic millers now have strong sentiment to support prices. But soybean meal market has gone into thin trade due to seasonally slack demand after the Lunar New Year, and stocks have increased to 700,000 tonnes in coastal China. Besides, oils prices are also soaring. These are constraining rises in soybean meal prices. As China’s soybean imports are small, and U.S. soybean futures already broke the 1,400 cents level, short-term soybean meal prices will keep strengthening in China. Buyers are suggested to buy dips to maintain appropriate stocks, but not to chase after excessively high prices.

Rapeseed meal: Brazilian soybean harvest has been in slow pace, which will boost U.S. soybean export demand. As a result, U.S. soybean supplies may be further tight. CBOT soybean futures ended sharply higher on Tuesday. Meal futures also move higher with high opens on China’s exchanges. Spot rapeseed meal is offered at 2,900-3,000 CNY/tonne in coastal regions, an increase of 10 CNY/tonne, in tepid trade. So far, net crush margins for soybean futures have been negative. And the monthly soybean arrivals during February and March could be only 6.2 mln tonnes or even lower. Besides, many oil plants have basically sold out February soybean meal contract in advance and also make faster progress in March contract, so factories and dealers have strong intention to raise price. These have continued bolstered meals prices. But the demand in market is still weak as the Lunar New Year has just passed, and aquaculture will not be started until March. In this case, soybean meal and rapeseed meal stockpiles are significantly higher. Furthermore, oils take wild gains, so that investors take profit from buying oils and selling meals, which also curbs prices rises of meals. Nevertheless, the overall rapeseed meal market will likely follow futures to stay strong, dominated by higher cost due to a surge on soybean.

Imported fishmeal: Imported fishmeal prices steady with a decline today and can be traded through negotiation. Peruvian Standard SD with 65% protein content is 10,000-10,300 CNY/tonne, down 200 CNY from Tuesday; Peruvian higher-quality SD with 65% protein content is 10,400-10,800 CNY/tonne, down 200 CNY; Peruvian higher-quality SD with 67% protein content is 11,000-11,200 CNY/tonne, down 200 CNY; and Peruvian Super Prime SD with 68% protein content is 11,500-11,700 CNY/tonne, down 200 CNY. China’s fishmeal stocks are picking up at a brisker pace with new cargoes arriving at ports (especially Shanghai port) after the festival, and domestic aquatic feed demand is still sluggish at present, so that domestic traders start to cut down prices. However, Peruvian offers keep firm as manufacturers are signing new-season contracts at a decent pace, which is lending support to domestic traders and may limit price declines. Domestic fishmeal market is predicted to keep steady with a slight adjustment in the near term.

Stocks at ports: Dalian 6,200 tonnes, Tianjin 750 tonnes, Shanghai 29,500 tonnes, Huangpu 41,500 tonnes, Fuzhou 13,800 tonnes, Fangchenggang 1,000 tonnes and 4,040 tonnes at other ports.

FOB quotes from foreign markets today: Mar/Apr shipments are quoted at 1,460 USD/tonne for Peruvian Standard with 65% protein content and at 1,680 USD/tonne for Peruvian super with 68% protein content. Chilean Standard with 65% protein content is quoted steadily at 1,430 USD/tonne, and super with 68% protein content at 1,600 USD/tonne.

Cottonseed meal: Cottonseed meal prices stay stable with a partial rise of 50-150 CNY/tonne in China today. U.S. soybean futures soared on Tuesday. Meal futures also go up with high opens on China’s Dalian Commodity Exchange today, but stay below the previous close. Spot soybean meal fluctuates by 20-40 CNY/tonne in coastal regions. The monthly soybean arrivals could only reach 6.2 mln tonnes in February and March, which may lead crushing mills to suspend the operation due to shortages of soybean. Besides, the crush margins for U.S. soybean futures has been negative after a skyrocket, and oil plants tend to lift price, boosting meals prices. Moreover, most of cottonseed oil plants have yet to resume the operation, bringing some support to cottonseed meal market. But market demand has slackened after Spring Festival holidays, weighing on cottonseed meal market tentatively. Buoyed by the advance in soybean meal, it is predicted that cottonseed meal market will be in an uptrend in the near term.

(USD $1=CNY ¥6.46)