China soymeal futures hit 2-mth low amid new ASF outbreak

Soymeal futures in China slumped to a two-month low on Wednesday as bearish sentiment was boosted by new African swine fever (ASF) outbreaks reported in China and speculation that they could lead to less soymeal usage in animal feed.

Soymeal futures contracts on the Dalian Commodity Exchange fell 2-3% across the curve with the most liquid contract down 2.36% to CNY3,269/mt ($502/mt) – the lowest level since late December last year.

The sell-off was partly driven by the latest announcement of a case of ASF found in a truck in Sichuan province with 10 piglets, two of which died from the disease, according to a statement released by China’s Ministry of Agriculture and Rural Affairs (MARA).

While several sources pointed to the overall market sentiment and weak demand of soymeal.

“The sentiment is too bad and the [Wasde] report was not bullish at all,” said one China-based analyst.

“The corn price is too high. And many companies have been using wheat to replace corn and soymeal in their feed,” said one feed trader.

Corn futures on the Dalian also slipped to the lowest level in a month with the most liquid contract down nearly 2% on the day to CNY2,716/mt ($417/mt).

On the contrary, hog futures on Dalian ticked up slightly with the most active contract up 0.5% to CNY28,050/mt ($4,309/mt).