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December 21, 2016

 

China Soymeal Weekly: Tight supply strengthens market despite slower demand (week ended Dec 18, 2016)

                                                                            

An eFeedLink Exclusive
 

 

Price summary

 

Prices moved higher.

 

Weekly transacted prices of soymeal in China

Region

Protein content (%)

Price as of Dec 11
(RMB/tonne)

Price as of Dec 18
(RMB/tonne)

Price change
(Percentage)

Heilongjiang

43%

3,450

3,450

0

Liaoning

43%

3,420

3,670

250

Hebei

43%

3,340

3,390

50

Shandong

43%

3,420

3,500

80

Jiangsu

43%

3,400

3,450

50

Guangdong

43%

3,400

3,380

-20

Prices are representative and are for reference only.
RMB1=US$0.1440 (Dec 20)


 

Market analysis

 

CBOT soy futures prices closed lower during the week in review.

 

Meanwhile, in South America, Argentina's soy field ploughing progress was slower than expected,

 

Demand for soymeal softened in China as most feed millers have stocked supplies sufficient to last until late January. Hence, weekly transaction volume dropped 29% to 1.07 million tonnes.

 

Nonetheless, prices of soymeal moved higher in most regions as supplies tightened while stricter pollution controls in the production region resulted in lower operation rates.

   
 
Market forecast

 

Demand for soymeal is poised to slow as most buyers have stocked ample supplies. However, should production remain low due to environmental controls prices will remain firm amid tight availability.

 

Feed demand is poised to increase in the coming weeks due to pre-Chinese New Year stimulation. This will lend support to the soymeal market. Nonetheless, with soy availability abundant and the operation rates of crushers staying high, the upward scope of the market will be limited amid sufficient supplies.
 

  

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