Price snapshot for first week of June
The hog complex in China continued to lift domestic meat and feed prices to the upside. Piglet prices remained bullish in the first week of June, gaining more than 3% from the previous week. The price level has risen roughly 7.2% in the past two weeks.
Live hog prices ticked nearly 1% higher on the week to 15.81 yuan/kg ($2.37/kg) last week, which was up more than 2% in the past two weeks.
Pork prices also climbed over 2% higher to 25.91 yuan/kg ($3.88/kg), lending bullishness to other meat prices – chicken, beef and lamb all up marginally.
Animal feed prices were largely steady over the past week with hog and poultry feed prices moving sideways and prices for corn and soymeal were also stable.
Soybean oil futures hit new contract high
Soybean oil prices on the Dalian Exchange continue to rally with the September contract making new highs on both Monday and Tuesday of this week. Price for the contract rose another 1.1% today, reaching an intraday high of 12,004 yuan/ton ($1,800/ton).
Since the start of 2022, Dalian soybean oil futures have rallied nearly 40%.
Expectations of weaker soybean arrivals and slower crushing in the coming months continue to support the market’s bullish sentiment. Rising soybean oil prices will add to the inflationary pressure growing in China’s food sector which has seen other staples such as wheat and pork becoming more expensive in recent months.
Retailer pushes new safety standard for pre-made dishes
JD, a large online retailer, announced it was introducing its own standards for pre-made meals on the platform. The retailer’s new standards include five categories related to food safety such as additives, heavy metals, and bacteria.
The market for pre-made meals and dishes in China is relatively new and under-developed. However, the space has seen rapid growth as consumers increasingly opt for convenience and avoid restaurants amid covid outbreaks. According to JD, sales of pre-made dishes on its platform rose by 156% in 2021. However China currently lacks any national standards for the products and product quality can often be mixed.
US soybean exports to China sinks to new YTD low, sorghum volume rebounds
US exports of 2021/22 soybeans to China during the week of May 27 to June 2 slumped to a new low for 2022 whereas sorghum shipments to China rebounded sharply, according to USDA data overnight.
Soybean exports to China totalled just short of 13,500 tons, down 79% week on week. This was
Shipments to the world’s largest soybean importer only accounted for 13% of overall US shipments last week.
On the contrary, US exports of current sorghum crop to China rebounded 45% on the week to 204,239 tons, accounting for nearly all US sorghum exports that week.
For corn, US exports to China were mostly stable week on week at 266,657 tons last week, which represented 19% of total US corn exports during the week.
The US did not export any wheat to China last week.
Chart of the Day – Rice stockpile auctions rebound
A total of 54,000 tons of rice reserve was traded at the national auctions yesterday out of an offer of 909,000 tons. The average traded price was 2,586 yuan/ton ($388 USD/ton).
Most of the purchased rice was in Heilongjiang province. With the Covid situation in northeastern China improving, the market is expecting consumption and prices to rise.
