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Livestock & Feed Market

July 3, 2018                           
 
China Soymeal Weekly: China soymeal and global soy prices continue to diverge (week ended Jul 2, 2018)
                                                                                  
An eFeedLink Exclusive
 
 
Price summary
 
Prices increased further.
 

Weekly transacted prices of soymeal in China

Region

Protein content (%)

Price as of Jun 25
(RMB/tonne)

Price as of Jul 2
(RMB/tonne)

Price change
(Percentage)

Heilongjiang

43%

3,130

3,140

10

Liaoning

43%

2,840

3,080

240

Hebei

43%

2,970

3,080

110

Shandong

43%

3,000

2,980

-20

Jiangsu

43%

2,980

3,010

30

Guangdong

43%

2,920

3,050

130

Prices are representative and are for reference only.
RMB1=US$0.1492 (Jul 3)

 
 
Market analysis
 
Over the week, prices of CBOT November soy futures plummeted 4.0%.
 
China's soymeal prices continued to diverge from the global soy futures prices. While speculators adopted short positions in the global markets in view of excess soy availability should China impose a 25% tax on US soy imports, Chinese buyers stocked inventories of soymeal fearing a likely supply crunch.
 
Hence, even as CBOT soy futures prices fell sharply, soymeal prices increased 0.86% over the week.
 
Currently, China importers are preparing for the imminent import tariff hike starting July 6 by shirting their acquisition grounds to south America. In H2 2018, China is projected to import 32 million tonnes of soy from Brazil and another 2 million tonnes from Argentina.
 
 
Market forecast
 
As buyers have stocked some supplies, demand for soymeal is expected to slow, hence holding prices stable.
 
In the near term, soy imports from south America should remain ample. However, in the longer term, even supplies from south America will not be unable to fulfil the void resulting from the plunge in US soy imports. Soymeal prices are set to stay firm amid tight availability.
 

 


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