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Owing to an Abundant Supply, the Influence of Trade War on Soybean Meal Market is Gradually Weakening

China Agriculture Report By CnAgri2018-09-19 11:20:15China Agriculture Report Print A few days ago, American Government proposed to conduct a new round of trade negotiations with China. BOABC thinks, if China and the U.S. terminate trade war, soybean meal prices will go down greatly in the near future. Even if trade war continues, the growth of soybean meal prices will be limited.   
First, influenced by trade war, China takes many measures to reduce the dependence on American soybean, including shifting the demand toward South America, carrying out and promoting low-fat diet feed formula, approving the imports of soybean meal and rapeseed meal from India and cutting down the tariffs of related products, etc. The markets also have digested adverse effects of trade war, and soybean meal prices have improved and would see a limited growth in the future. 
Second, African swine fever in September showed the trend of a regional outbreak, bringing a relatively big threat to an increase in pig prices. Due to diseases, a ban and a limitation on hog farming are strengthened; besides, owing to a pressure of cutting down hog stocks, sow stocks would further go down, which not only cuts down current hog stocks, but also dampens farmers’ enthusiasm to replenish after swine fever.  
Third, August soybean imports increased greatly to 9.15 million MT, up 13% or 1.14 million MT from last month. It makes soybean stocks at the ports still maintain at a high level of 6.9 million MT. With the addition of current soybean meal stocks of 1.02 million MT owned by oil plants, the shortage of soybean meal supply resulted from trade war would be delayed. The supply of soybean meal still would be in an abundant supply in the near future. 

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