Today (Oct. 31st), 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 falls by 0.02-0.04 yuan/kg, which can be contributed to the weak meal and oil markets, dismal crush margins and oil mills’ hand-to-mouth buying in face of high-priced and new cottonseed. But trade war is yet to finish, and the volume from Xinjiang is small due to the traffic tensions and expensive freight, so cottonseed will have little room for declines. In the short term, cottonseed market may fluctuate to go weak on the back of oil and meal price falls.
Oils:
Summary: U.S. farmers took advantage of favorable weather to speed up their harvesting pace, so US soybean fell again last night. Today, oils on the Dalian Commodity Exchange (DCE) drop slightly, and spots of soybean oil and palm oil also decline partially and trade low. Soybean oil stock has stayed at a historical high as operation rate remains high under healthy crush margins. In this context, forward supply gap will be obviously smaller than expected, which has shaken oil mills’ confidence in supporting prices, so oil futures remain under pressure to slip today. But the space for declines will be limited, for soybean meal demand will fall as China has released standards to lower down protein content and traders have turned to import sunflower meal and rapeseed meal, which means that soybean crushing volume will reduce, while stockpiles for packing oil in the run up to Chinese Spring Festival will gradually start in December. In general, oil market will continue to fluctuate for consolidations in the short term, but will go up gradually in mid-to-long term. Buyers can wait for steady falls to replenish on the dips.
Soybean oil: GB Grade I soybean oil is priced at 5,530-5,600 yuan/tonne in domestic coastal areas, some down by 10-20 yuan/tonne (Tianjin 5,560, Rizhao 5,530, Zhangjiagang 5,600, Guangzhou 5,530-5,550).
Palm oil: 24-degree palm oil is mostly priced at 4,610-4,710 yuan/tonne in coastal areas (Tianjin 4,700-4,710, stable; Rizhao not offered; Zhangjiagang 4,700, down 20; Guangzhou 4,610-4,630, Xiamen not offered).
Imported rapeseed oil: Price remains basically stable today, where it is 6,240-6,410 yuan/tonne in coastal areas (Fujian not offered; Guangdong 6,410, stable; Guangxi 6,350, stable). Currently, oils enter into the slack season, with rapeseed oil and soybean oil inventories climbing gradually. In addition, the overall market turns more volatile on account of a meeting between the US and China presidents in late November. The short-term rapeseed oil market is predicted to fluctuate to adjust, but it will be in a bullish stance after packing-oil stockpiles start in December when the crush volume is small due to the new standards in lowering down meal consumption. Buyers can wait for steady falls and replenish properly on the dips.
Cottonseed oil: Oils on the DCE fall back modestly today. Cottonseed oil slips by 50 yuan/tonne partially for these factors: large inventories of bulk oils, a fall of 10-20 yuan/tonne of soybean oil spots and its own limited end demand amid the increasing amount of new cottonseed oil on the market. But oil mills tend to hoard their small stock to support the price amid the trade war, so cottonseed oil market still has limited declines. On the whole, the market may continue to fluctuate in the short term, so buyers can just wait on the sidelines.
(USD $1=CNY 6.97)
