China’s soymeal futures slid nearly five per cent in their sharpest decline in eight years on Feb. 26, as investors took profit and new African swine fever outbreaks stirred concerns over demand.
The most actively traded soymeal futures on the Dalian Commodity Exchange for May delivery fell 4.86 per cent to 3,485 yuan (US$539.57) per tonne following four days of gains, amid worries the new pig disease cases would hit demand for the major feed ingredient.
“Prices were rising mainly because soybean cargoes would be limited in March, and people did not think the African swine fever outbreaks were that severe,” said a manager with a meat producer in northern China.
“But then as more surveys were carried out in the industry, the market found that disease is really bad,” said the manager, who declined to be named as he was not authorized to talk to the media.
Chinese crushers were expected to cut operations in March due to limited supplies as rains in top exporter Brazil delayed harvests and shipments.
“There is also some profit-taking, which is quite normal,” said Wang Xiaoyang, senior analyst with Sinolink Futures.
“Also the African swine fever (ASF) disease is indeed very severe and there are signs that outbreaks are spreading from the north to the south.”
Falling Chicago soybean futures following lower U.S. export sales pressured domestic soymeal prices as well, traders said.
“Not-as-expected USDA weekly export sales data further stimulated the willingness of long investors to leave the market, resulting in falling soybean meal prices today,” said a Shanghai-based senior trader.