Overall feed consumption fell back and soybean meal prices rebounded against the trend

Recently, the price of soybean meal has ushered in a big rebound with the US market, and from the perspective of the inventory of soybeans and soybean meal, the arrival of huge amounts of soybeans in Hong Kong has not put too much pressure on the inventory, so only from the perspective of protein prices, it seems that the domestic demand situation is not bad, is this really the case?

First of all, let's look at the production data. according to the data of 180 key tracking enterprises of the Ministry of Agriculture, the total national feed output in the first half of the year was 87.3 million tons, down 1.7% from the same period last year, of which pig feed and egg feed decreased by 7.1% and 3.4% respectively. Meat and poultry feed dropped 1.05% year-on-year.

Secondly, the pig stock is still in the decline channel, the demand is hardly optimistic. Pig stock data from 4000 monitoring sites of the Ministry of Agriculture in May said that the stock of live pigs decreased by 0.2% from the previous year, 9.80% from the same period last year, 1.2% from the previous year for breeding sows, 15.50% from the same period last year, and 0.08% from the previous year for fattening pigs. down 9.11%. Even if the price of live pigs and piglets rebounded at present, the stock column has not been restored, the pig breeding cycle is longer, and it will take time for restorative growth to appear.

Finally, corn prices fell sharply from the same period last year, confirming that demand is low. The amount of corn purchased by temporary storage in 2014 and 2015 reached 83.29 million tons, 14.1 million tons more than that in 2013 and 2014. the huge temporary storage acquisitions did not push up corn prices, but only slowed down the downward trend of corn prices. as of July 8, the purchase price of corn in feed factories in the main producing areas was 2301 yuan / ton, which was still significantly lower than the same period last year.

Since May 2014, the huge supply of high global soybean production has continuously depressed soybean sales prices. with the decline in soybean costs in Hong Kong, domestic soybean meal prices have repeatedly broken new lows. At the beginning of 2014, the market generally expected domestic soybean imports to reach 74 million tons, which is now expected to reach 78 million tons, an increase of 11.9 percent over the same period last year. The focus of the market began to shift to whether China can consume such a large amount of purchases, and when the oil factories will expand their warehouses, the market is shrouded in pessimism, but as time goes by, the expectation of warehouse expansion has been repeatedly postponed, and after the arrival of huge amounts of soybeans in Hong Kong, soybean stocks in ports and oil factories are lower than in the same period last year. At the end of June, with the weather speculation in the US market, the atmosphere of the market began to increase, and the intention of the oil factory to stand up to the meal became more obvious.

Research information shows that it is not the demand for better, the increase in the proportion of soybean meal is the root cause of the increase in consumption. As the price trend of soybean meal and miscellaneous meal and imported DDGS is at a historical low, feed enterprises have increased the proportion of soybean meal to reduce the proportion of miscellaneous meal. From a variety point of view, due to the high requirements for palatability and toxins in pig feed, the addition of miscellaneous meal and corn by-products is always at a low level, so the increment of soybean meal in pig feed formula is negligible. The increase in soybean meal consumption mainly comes from the increase in the proportion of soybean meal in poultry feed and aquatic feed formula. Taking South China as an example, poultry feed is often added 5-8% miscellaneous meal to reduce the cost of formula. At present, it has been completely replaced by soybean meal, and the substitution of aquatic products is more obvious. the addition of rapeseed meal in freshwater fish is often maintained at 20% 35%, but it has been reduced to about 15%, and some enterprises have completely stopped using rapeseed meal. Soybean meal has gradually replaced other protein raw materials because of its high performance-to-price ratio. Substitution has taken place in 2014 and intensified in 2015.

From the point of view of the increasing factors of protein demand in China, before 2000, the demand for livestock products such as meat, eggs and milk maintained a double-digit growth rate, which led to the continuous expansion of livestock and poultry breeding scale and the rapid growth of protein feed demand. Since then, the demand growth rate of meat, eggs, milk and other animal products began to slow down, the overall demand for protein feed slowed down, but the differences between varieties began to show. The amount of soybean meal as the main protein raw material formula continues to increase, and the demand growth rate is still strong. Under the premise that the total protein demand slows down and the formula substitution space decreases, the demand growth of soybean meal will also be restrained in the future.