Feed Material Prices Showed the Decreasing Trend, Which Would Relieve the Pressure from Farming Costs

By CnAgri2018-04-17 15:49:58 Print In early April, influenced by China-U.S. trade war, domestic soybean meal prices soared sharply, stimulating feed companies to raise fee quotations for the second time in 2018 and further aggravating the loss of hog farming. Entering middle April, owing to relieved tensions between China and U.S., soybean meal prices started to slump and returned to the previous level of RMB 3,300/MT. Without the influence of trade war, feed material prices would drop easily and won’t ascend in the near future in the view of supply and demand.
 
(1) The markets bear great pressure because of the increasing supply of soybean meal. It is busy season of supply of soybean in Brazil now, and the companies are more willing to purchase Brazilian soybean. Based on forecasts on shipping date, the monthly average import of soybean in the second quarter of 2018 still would reach 9 million MT. Along with the current high operating rate, soybean meal would be in an abundant supply.
 
(2) The weekly average auction volume of temporarily-stored corn in the near future would bring certain pressure on market. Except high-quality corn, common corn prices would go down.  
 
(3) The quotas of catching fish in central and north Peru in the new fishing season ascended to 3.32 million MT, highest in the last 7 years, resulting in a great decline in international fish meal prices. Along with the increasing of supply pressure, domestic fish meal prices fell and saw a weekly average decline of 300 RMB/MT. 
 
(4) Amino acid prices also would go down. Along with a weak demand, an oversupply resulting from the releasing of capacity, difficulty in exporting, and a decline in corn costs and soybean meal prices, amino acid prices also would go down. 
 
A decline in feed material prices would relieve the pressure of farming costs to some extend.