SunSirs: Weak Supply & Increase Demand, China Rapeseed Meal Fluctuates and Falls

According to the monitoring of the Commodity Market Analysis System of SunSirs, the average price of rapeseed meal in the domestic market was 4,083 RMB/ton on September 1st. On December 4th, the average price of rapeseed meal in the domestic market was 2,961 RMB/ton, with a decline of 27.47% during the period. Among them, the price dropped by 7.14% in September, 11.65% in October, 8.42% in November, and three consecutive months of decline from September to October.

Since September, the rapeseed meal market has shown a continuous downward trend, with the largest decline of 5.31% during the week, mainly a basic decline, with only a slight increase at the end of September.

Canadian rapeseed CNF prices continue to decline: In September, the new season of rapeseed harvesting in Canada began, and seasonal harvest pressure was heavy. In addition, the weakening of the external market put pressure on Canadian rapeseed prices, causing them to decrease. The progress of rapeseed harvesting is good, and Canadian rapeseed CNF prices continue to fall, leading to a decrease in domestic import costs and a negative impact on domestic rapeseed meal prices.

Strong expectations for increased supply: Oil factories have good profits from rapeseed pressing, domestic ship buying is active, and the supply of rapeseed meal is expected to be loose. There is a strong expectation for an increase in imported rapeseed supply from September to December, continuously suppressing the downward pressure on rapeseed meal prices. According to data statistics, from January to October 2023, China imported 4.2696 million tons of rapeseed, a year-on-year increase of 354.89%. In October, the domestic import of rapeseed reached 34,400 tons, a decrease of 89.29% month on month and 55.44% year-on-year. In October, China imported 263,900 tons of rapeseed meal, an increase of 63.83% month on month and 72.60% year-on-year. Although the quantity of imported rapeseed decreased month on month in October, the quantity of imported rapeseed meal increased month on month, making up for the shortage of imported rapeseed. It is expected that a large amount of imported rapeseed will arrive in Hong Kong one after another, with sufficient rapeseed supply and loose expectations for rapeseed meal supply. The rapeseed meal market is constantly under pressure and is being lowered.

Low demand season: Entering September, the temperature gradually decreases, and the peak season for aquaculture comes to an end. The demand for rapeseed meal used for aquatic feed production gradually weakens, while the rigid demand decreases. The pace of market procurement slows down, and the demand for rapeseed meal is sluggish, dragging down the continuous decline of the rapeseed meal market. The price difference of soybean and rapeseed meal is at a high level, and the advantage of rapeseed meal substitution is evident, limiting the downward space of rapeseed meal. However, the profit of the breeding industry is poor, feed production is reduced, and the demand for rapeseed meal is decreasing. The demand for rapeseed meal is not good, causing the price center of rapeseed meal to continuously shift downwards.

In terms of soybean meal: According to the monitoring of the commodity market analysis system of SunSirs, the average market price of soybean meal on September 1st was 5,012 RMB/ton, and on December 4th, the average market price of soybean meal was 3,942 RMB/ton, with a decline of 21.35% during the period. In the fourth quarter, the import volume of soybeans to port continued to increase, and the supply pressure of soybean meal doubled, resulting in weak terminal demand. The domestic soybean meal market was not good from September to November, and the rapeseed meal market followed suit.

Market forecast: Supply. According to relevant shipping forecasts, the expected arrival volume of domestic imported rapeseed in November is 450,000 tons, the expected arrival volume of domestic imported rapeseed in December is 670,000 tons, and the expected arrival volume of domestic imported rapeseed in January is 480,000 tons, all at historical highs. The pressure on rapeseed meal supply is expected to be relaxed; Demand, the fourth quarter is the off-season for aquaculture, and the demand for rapeseed meal is sluggish; On the other hand, the expectation of high soybean yields in South America is strong, and the soybean meal market is under pressure, putting pressure on the rapeseed meal market; The loose supply of rapeseed meal weakens demand, and the fundamentals are poor. It is expected to continue to fluctuate and operate weakly.

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