Today (Dec. 3rd), the market for meals in China is shown as follows:
Soybean meal: The US and China have reached consensus, where the former has agreed to suspend tariff increment planned on January 1st, 2019, and both sides will endeavor to have the transaction completed within the next three months. Such an easing trade state, especially with a US declaration that China has agreed to start purchasing agricultural product from its farmers, is bearish to domestic market. But the bearish stance has been offset partly by losses in the precious sessions. In addition, such an easing trade state is just provisional and there may be a round of tit-for-tat tariff announcement if two sides fail to reach a deal within 3 months. The declines of meals on the Dalian Commodity Exchange is smaller than expected, so is soybean meal. And domestic soybean meal spots follow to decline slightly and trade a little. The price is mainly at 3,080-3,150 yuan/tonne in coastal areas, down 10-50 yuan/tonne against last Friday. (Tianjin 3,100, Shandong 3,080-3,140, Jiangsu 3,085-3,140, Donguan 3,100-3,150, and Guangxi 3,130-3,150). Soybean meal market is negative for its dismal demand as hog farmers become inactive in replenishment under the rampant African swine fever. What’s more even concerning is whether there will be any official news that the 28% of soybean import tariffs will be restored to the original 3% now that China has agreed to purchase US agricultural products. If the tariff is cut, soybean meal market will post further declines; if not, it will see limited losses and will rally amid tight supply later. Buyers can take hand-to-mouth buying provisionally on account of uncertainties in the trade war.
Imported rapeseed meal: The price for imported rapeseed meal steps down today, of which it is 2,160-2,260 yuan/tonne in coastal areas, down 30-50 yuan/tonne. (Guangxi 2,200, down 20; Guangdong 2,200, down 60; Fujian 2,260). Rapeseed meal price is under pressure as its demand is subject to slack season of aquaculture and rampant ASF. But its stock has declined by 60% to 26,500 tonnes last week. Meanwhile, the trade war is yet to finish and will escalate if the US and China cannot reach a deal within three months. Therefore, rapeseed meal has seen smaller-than-forecast decline and is predicted to extend weak fluctuations in the short run. Participants need to keep monitoring whether soybean import tariff will be lowered down since China has agreed to purchase US agricultural product immediately. If the tariff is cut, meal market will fall bearish. Buyers can keep a light stock provisionally on account of uncertainties in the trade war.
Imported fishmeal: Today, imported fishmeal is quoted steadily and can be traded with price negotiations, with normal shipment at port. Northern ports: price is 10,200-10,300 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,900-11,100 yuan/tonne for Japanese SD with 67% protein content and 11,200-11,300 yuan/tonne for super steam fishmeal with 68% protein content. Southern ports: price is 10,200 yuan/tonne for Peruvian ordinary SD with 65% protein content, 10,900 yuan/tonne for Japanese SD with 67% protein content and 11,200 yuan/tonne for super steam fishmeal with 68% protein content. Stocks at port: Huangpu 75,000 tonnes, Fuzhou 36,000 tonnes, Shanghai 56,000 tonnes, Tianjin 1,000 tonnes, Dalian 19,000 tonnes, Fangchenggang 1,000 tonnes and 4,000 tonnes at other ports. Spot quotations (FOB) in foreign market keep stable: Peruvian ordinary SD fishmeal with 65% protein content is quoted at 1,330 USD/tonne, and 1,600 USD/tonne for super SD fishmeal with 68% protein content. Chilean ordinary fishmeal with 65% protein content is quoted at 1,510 USD/tonne, and prime with 68% protein content is 1,620 USD/tonne. Increasing inventory pressure under delicate demand, together with a relatively strong fishing outlook in Peru, has been cracking down on the sale sentiment of holders, so short-term fishmeal market will probably stay stable to go weak.
Cottonseed meal: Cottonseed meal sheds 50-100 yuan/tonne for its light trading volume, for buyers remain cautious in purchasing under the outbreaks of the ASF and the bird flu. In addition, soybean meal spots decline by 10-20 yuan/tonne amid an easing state after the meeting between the US and Chinese leaders. But the bearish stance has been offset partly by previous losses, , and the trade war will remain cloudy in the next three months. In this case, cottonseed meal price decline is limited by its small supply and high cost of cottonseed. Therefore, cottonseed meal may post narrow fluctuations to go weak in the short term. By the way, participants need to keep monitoring whether the 28% of soybean import tariff will be restored to the original 3% now that US declared China has agreed to purchase US agricultural product immediately. If it is restored, oil market will fall bearish.
(USD $1=CNY 6.90)
