City in Henan goes into full lockdown, feed companies rush to build stocks
Anyang city in Henan province is going into a stricter lockdown on Tuesday, following local transmission of the omicron variant.
The local government banned vehicles from the road Monday evening, and supermarkets were told to suspend any business unrelated to selling daily necessities. Residents in the city are also encouraged to stay home.
This measure was introduced as Henan province reported the highest number of local cases across the country. China had 110 local transmitted cases on Monday of which 87 were in Henan.
Tianjin reported new additional cases of omicron variant as well. Currently health officials are reporting that the source of the Henan outbreak was a college student who travelled from Tianjin to Henan on December 28.
This adds a layer of complexity to the situation as it means omicron would have present for at least two weeks in Henan and even longer in Tianjin.
Therefore, the feed industry is reacting strongly to the latest outbreaks in northern China with buyers snapping up soymeal to build their stocks as fears of logistic disruption mounted.
Soybean meal cash basis continued to firm on Tuesday after rising sharply the day before.
Egg prices fall ahead of Chinese New Year
Egg prices, which typically see strong demand ahead of Chinese New Year, are continuing to fall.
Prices in the Beijing wholesale market hit 11.26 yuan/kg (US$1,768/ton) in October, the highest level in the fourth quarter of 2021, but have been trending steadily lower since. Prices hit 9 yuan/kg (US$1,413/ton) on Tuesday, down 20% in just over two months.
Many farmers are accumulating inventory since October due to weaker market price, according to reports by state newswire CCTV News.
Weaker prices and demand for pork has affected egg prices going into the holiday. New covid lockdowns would also weigh on egg demand, as school cafeterias and company canteens are typically strong sources of demand.
Soybean cargo market update: trades stagnant as market eyes Wasde
Soybean cargo purchases by Chinese importers remained stagnant last week as the market awaits to see if the USDA confirms the rumors of lower-than-expected 2021/22 Brazilian output estimate in the upcoming Wasde report this Thursday.
The pace of cargo buying slowed drastically since mid-December 2021 with the weekly volume falling from 15-20 cargoes per week to single digits.
Traded volume slumped to just six cargoes two weeks ago due to weak crush margins and the holiday season.
The volume ticked up slightly last week as buying interest for 2022/23 new crop US soybeans grew amid rising concerns of crop damage in Brazil due to dry and hot weather condition.
Trading houses were said to have snapped up 15-20 cargoes of October 2022 shipment from both US Gulf and the PNW last week. But it is yet to be confirmed that most of these cargoes will head to China eventually.
US corn, sorghum exports to China jump, soybean exports fall
Corn exports from the US to China during the week ending January 6 rose sharply to 275,000 tons, more than tripled from the previous week, based on USDA data.
Exports of US corn to China accounted for 27% of total US corn exports during the week.
Sorghum exports to China also jumped during the week to nearly 200,000 tons, accounting for almost all US sorghum exports in the week.
In contrast, US soybean exports to China fell 23% on the week to just over 577,000 tons. But it still accounted for 64% of all US soybean exports during the week.
Meanwhile, none of the 233,000 tons of US wheat exports in the week went to China.