Today is 04/19/2024

Daily Review on Meal Market in China--4/22/2021


Today (Apr 22), the market for meals in China is shown as follows:


Soybean meal: U.S. soybean futures rose to their highest in seven years on Wednesday on tight supplies and weather concerns, and meal futures also continue rising on China’s Dalian Commodity Exchange today. Spot soybean meal prices go up 40-70 CNY to 3,420-3,550 CNY/tonne. (Tianjin 3540-3550, Shandong 3450-3470, Jiangsu 3420-3530, Guangdong 3460-3500, and Guangxi 3500.)


Crush margins are at still at loss, and soybean crushers in Rizhao, Shandong Province, may be in downtime for 7-10 days from April 24th as steam supply will be affected by the maintenance of power plants. Domestic soybean meal stocks have fallen notably. In addition, aquaculture sector is entering into the peak season, and feed production has risen by 30% on year. Besides, downstream buyers are also stocking up in batch for the 5-day Labour Day holidays. Hence, soybean meal market is under better trade and quicker shipments, and some millers are limiting the delivery. Millers now have stronger sentiment to hike price, which is supporting meal market. However, domestic feed manufacturers have adjusted their formula due to excessively high corn prices and applied wheat and paddy rice to replace corn, so high-protein wheat will likely reduce soybean meal use. And China’s Ministry of Agriculture have formulated and released a technical plan for replacing the amount of corn and soybean meal in feed, as a bid to safeguard the safety of feed and grain supply. And domestic investors are taking the arbitrage under strong oils performance. These are weighing on gains in meal price. Overall, short-term soybean meal market is predicted to fluctuate to strengthen.


Rapeseed meal: U.S. soybean futures soared to the highest over the past seven years on Wednesday on U.S. domestic strong cash market and a steep rise in global vegetable oil price. Meals futures also continue rising on China’s exchanges today. Spot rapeseed meal is offered 20-40 CNY/tonne higher at 2,850-2,920 CNY/tonne in coastal regions, in tepid trade. Crush margins for rapeseed futures have been negative on China’s domestic exchanges due to tight supply of Canadian rapeseed. Besides, many farmers feed more fingerlings with the weather warming up. Aquatic feed production in March got a sharp increase of 29% compared to the previous month. In this case, oil plants tend to prop up price, which boosts rapeseed meal price. However, China’s soybean arrivals in April-June could bump up to 27.60 mln tonnes with a quicker pace in Brazilian soybean shipment. Furthermore, several crushing mills are forced to halt the operation on account of overhang in rapeseed meal and thereby urge deliveries, weighing on meals prices. Accordingly, rapeseed meal price is unlikely to rise too excessive and may keep strengthening with fluctuations in the near term.


Imported fishmeal: Imported fishmeal prices steady in China today, in tepid trade. Peruvian Standard SD with 65% protein content is 9,600-9,900 CNY/tonne; Peruvian higher-quality SD with 65% protein content is 10,000-10,200 CNY/tonne; Peruvian higher-quality SD with 67% protein content is 10,500-10,600 CNY/tonne; and Peruvian Super Prime SD with 68% protein content is 11,000-11,200 CNY/tonne. Feed consumption on fishmeal remains limited as it is difficult to achieve a recovery in aquaculture demand overnight and due to the African swine fever. Meanwhile, fresh fishmeal cargoes are arriving at domestic ports and port stocks have been getting near to a high level of 190,000 tonnes, so that port traders are under growing pressure. Chinese traders are mostly waiting for the release of the quotas and conclude transactions on negotiated prices.


Stocks at ports: Dalian 20,150 tonnes, Tianjin 2,020 tonnes, Shanghai 65,575 tonnes, Huangpu 76,380 tonnes, Fuzhou 20,540 tonnes, Fangchenggang 1,200 tonnes and 4,285 tonnes at other ports.


FOB quotes from foreign markets today: May/June shipments are quoted steadily at 1,370 USD/tonne for Peruvian Standard with 65% protein content and at 1,590 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 in China stay stable with a partial increase of 20-50 CNY/tonne today. U.S. soybean futures skyrocketed on tight supply and concerns over weather conditions during the soybean planting season, and recorded a seven-year high. Meals futures also further rise on Dalian Commodity Exchange today. Spot soybean meal increases by 40-70 CNY/tonne in coastal regions. Farmers will likely feed more fingerlings due to the warmer weather and higher price in aquatic products, thereby seeing a gradual recovery in demand from aquaculture. With a distinct improvement in soybean meal trading and delivery, soyoil mills are more willing to lift price, which boosts meals prices. But China issued guidelines on Wednesday recommending the reduction of corn and soymeal in pig and poultry feed. Moreover, investors take an arbitrage from buying oil and selling meal as oils stage wild gains. These have impacted price rises of meal products. Underpinned by a surge in US soybeans, short-term cottonseed meal price is projected to fluctuate at the high level.


(USD $1=CNY ¥6.49)