Today is 03/29/2024

Daily Review on Markets for Oilseeds and Oils in China

2018-10-30 www.cofeed.com
     Today (Oct. 30th), the market for oilseeds and oils in China is shown as follows:
 
  Oilseeds:
 
  Imported soybean: Imported soybean quotation remains steady today, of which non-GM Canadian soybean is not offered for out of stock and Russian soybean is unchanged from yesterday at 3,650 yuan/tonne. And GM soybean is not offered. Amid the ongoing US-China trade frictions, according to the latest statistics by Cofeed, imported soybean at port is projected at 6.399 Mln tonnes boarded 102 ships to domestic ports in October, and probably only 17.1 Mln for November to January due to the cancellation of some ships for US soybean. The volume is far lower than that of the same period last year, of which it is 8.6842 Mln tonnes, 9.55 Mln tonnes and 8.48 Mln tonnes for November, December and January, respectively. Importers have a strong will to support the price as market participants show concerns over the soybean supply on later market. But imported soybean market is dented by its weak price performance due to its narrow price spread with domestic soybean. In general, as trade conflicts are yet to ease, imported soybean distribution markets may largely remain stable despite fluctuations on worries of forward supply.   
 
  Cottonseed: Cottonseed edges down by 0.02 yuan/kg partially today, for both cottonseed oil and cottonseed meal markets keep dropping and oil mills remain cautious in purchasing high-priced cottonseed and take the hand-to-mouth basis amid dismal crush margins and the increasing amount of new cottonseed. But the trade spat is yet to ease, and there is just a small volume of cottonseed from Xinjiang under transportation strains and expensive freight, so there is little room for cottonseed price to drop. Cottonseed may fluctuate to adjust on the back of the callbacks of its oil and meal, so buyers can just wait.   
 
  Oils:
 
  Summary: US soybean tumbled overnight to the lowest point for the past one month. Today oils on the DCE fluctuate narrowly, and domestic soybean oil and palm oil spots stay stable to fall and trade low. Operation rate picks up substantially due to healthy crush margins, bringing soybean oil stock to a historical high. So oil market is weak in rebounding under high pressure from fundamentals. So futures markets adjust frequently in recent days. But 29 feed enterprises have committed to carry out the new standards released by Chinese government, which, according to the ministry, will lower down soybean meal consumption by 11 Mln tonnes; hence, soybean meal market slumps, while the oil market will propped up by the completion of the “buying meal and selling oil” arbitrage. In addition, stockpiles of packing oil in the run up to Chinese Spring Festival will gradually start in December. Therefore, soybean oil will have limited downward potential, and once trade frictions escalate, its market will edge up again. As futures market still posts adjustments, buyers can just take the hand-to-mouth basis. 
     
  Soybean oil: GB Grade I soybean oil in domestic coastal areas is mainly quoted at 5,540-5,620 yuan/tonne, down by 10 yuan/tonne partially (Tianjin traders 5,560-5,570 yuan/tonne, Rizhao 5,540, Zhangjiagang 5,620 and Guangzhou 5,540). 
   
  Palm oil: 24-degree palm oil in coastal areas is mainly priced at 4,650-4,720 yuan/tonne (Tianjin 4,710-4,720, unchanged; Rizhao not offered; Zhangjiagang 4,720, Guangzhou 4,630-4,660; Xiamen not offered).
 
  Imported rapeseed oil:  Prices of imported rapeseed oil stay stable to rise slightly. The price in coastal areas is 6,240-6,410, up 10-20 yuan/tonne. (Fujian not offered; Guangdong 6,410, up 10; Guangxi 6,350, stable). Some investors thought trade would stop between Canada and China after a rumour that Canada was to suspend the trade agreement, but it finally turns out it is just the talk suspension on a free trade agreement, which will exert no influence on the normal trade between these two countries. So rapeseed oil on Zhengzhou Commodity Exchange erases part of yesterdays’ gains. Currently, soybean oil and rapeseed oil both hold high inventories, building an oversupply pattern. In addition, the US and China presidents will have a meeting in late November. Under such circumstances, rapeseed oil market will extend its fluctuations to adjust in the near term, but it owns limited downward space as the trade war continues. And once the trade war gets tough, the market will seize the chance to rise again. Buyers are suggested to replenish on the dips to build the inventory and take good control of the positions, but not to force up prices when uncertain about the market trend.      
 
  Cottonseed oil: Cottonseed oil falls another 50-100 yuan/tonne partially due to the increased amount of new cottonseed oil amid its low end demand and large inventories of bulk oils, as well as soybean oil’s steady loss of 10 yuan/tonne. But soybean oil mills are supporting the price as forward soybean arrivals will be less amid trade frictions, and oil mills are reluctant to sell their cottonseed oil at current small inventories and low prices, so cottonseed oil will have limited downward space. In the near term, cottonseed oil may extend its fluctuations to adjust, and buyers can just wait on the sidelines.    
 
(USD $1=CNY 6.97)