Today is 07/03/2022

Daily Review on Meal Market in China--4/25/2021


Today (Apr 25), the market for meals in China is shown as follows:


Soybean meal: U.S. soybean futures closed firm on Friday on tightening U.S. soybean supplies and intense competence for spring planting acreage and as the cold weather in the U.S. Midwest was unfavorable to fieldwork, coupled with renewed concerns over the inflation under a weak U.S. dollar. Meal futures declined on Friday’s after-hour trade on China’s Dalian Commodity Exchange, which is closed on Sunday today. Spot soybean meal prices are mostly not offered and some fluctuate by 10-20 CNY at 3,420-3,540 CNY/tonne, in thin trade. (Tianjin 3540, Shandong 3470-3490, Jiangsu 3420-3450, Guangdong 3440, and Guangxi no offer.)


China may bring in more than 10 mln tonnes of soybeans in May as Brazil is loading vessels at a quick pace. And domestic investors are taking the arbitrage of buying oils and selling meals due to strong performance in oils. These are negative to meal prices. However, the cost of importing soybeans have been lifted by rallying U.S. soybean price, so that crush margins for imported soybeans are at continued loss on Dalian board. Moreover, 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. Meanwhile, aquaculture sector is entering into the peak season, and feed production has risen by 30% on year. Besides, downstream buyers are also stocking up for the 5-day Labour Day holidays. Hence, soybean meal market is under better trade and quicker shipments. Domestic millers have strong sentiment to hike price, which is supporting meal market. On the whole, the market has shifted its attention to the weather in the U.S. soybean planting regions and the cost side will also overcast other bearish factors, so soybean meal prices may fluctuate to keep the strength.


Rapeseed meal: U.S. soybean futures further jumped on Thursday as worries about global tight supply triggered short covering and large buying. Rapeseed meal futures stay below the previous close on China’s Zhengzhou Commodity Exchange today, despite some rises. Spot rapeseed meal is offered at 2,840-2,910 CNY/tonne in coastal regions, a fluctuation of 10-20 CNY/tonne, in tepid trade.


Rapeseed volume purchased from June to August by crushing mills will likely lower than expectations due to persistent losses in crush margins. Besides, aquaculture is entering into a peak season, and 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 May could advance to 10.70 mln tonnes, and weekly soybean crush volume has been back to a normal level of around 1.80 mln tonnes in recent two weeks. Furthermore, some 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 likely to keep strengthening with fluctuations in the near term.


Imported fishmeal: Imported fishmeal prices climb fractionally in China today, in tepid trade. Peruvian Standard SD with 65% protein content is 10,000-10,200 CNY/tonne, up 300-400 CNY/tonne from Friday; Peruvian higher-quality SD with 65% protein content is 10,300-10,500 CNY/tonne, up 300-400 CNY; Peruvian higher-quality SD with 67% protein content is 10,700-10,900 CNY/tonne, up 200-400 CNY; and Peruvian Super Prime SD with 68% protein content is 11,200-11,500 CNY/tonne, up 200-300 CNY. Peru’s fishing quota for the first season in centre-north oceans in 2021 is fixed at 2.509 mln tonnes, which is 491,000 tonnes below a forecast of 3 mln tonnes. Peruvian traders have stronger sentiment to raise prices as they have presold over 50 percent. Hence, domestic traders also raise prices today. However, fresh fishmeal cargoes are arriving at domestic ports and port stocks have built up to nearly 200,000 tonnes. And 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. These may curbing the rise in fishmeal price. Overall, domestic fishmeal market is predicted to steady with a slight rise in the near term.


Stocks at ports: Dalian 21,020 tonnes, Tianjin 2,050 tonnes, Shanghai 66,035 tonnes, Huangpu 78,480 tonnes, Fuzhou 20,730 tonnes, Fangchenggang 1,240 tonnes and 4,335 tonnes at other ports.


FOB quotes from foreign markets today: May/June shipments are quoted higher by 40 USD at 1,410 USD/tonne for Peruvian Standard with 65% protein content and at 1,630 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 20-150 CNY/tonne today. Aquaculture starts being in a full swing. And downstream buyers are successively stocking up with the forthcoming Labour Day holiday. In this case, soybean meal trading and delivery have improved recently, which leads oil plants to tend to prop up price. Hence, meals prices are supported. However, China’s soybean arrivals in May could surpass 10 mln tonnes as the pace of Brazilian soybean shipment is quicker than expected. Furthermore, investors take profits from buying oil and selling meal as oils stage wild gains. These have together depressed price of meal products. In short, underpinned by a surge in US soybeans, short-term cottonseed meal price is projected to fluctuate to keep strong.


(USD $1=CNY ¥6.49)