Today (Oct. 23rd), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean is quoted higher today, of which non-GM Canadian soybean is 4,180 yuan/tonne and Russian soybean is 3,650 yuan/tonne, both holding the line of yesterday. And GM imported soybean is not offered. Due to the ongoing US-China trade frictions, soybean import volume is forecast to be less than 18 Mln tonnes in November to January, far lower that of the same period last year. Worried about inadequate supply in later market, importers show strong willingness to support prices. Nevertheless, the price advantage of imported soybean turns invisible due to its narrowed spread with domestic soybean, so its shipment is blocked. Besides, its distributed markets have little potential for further rises due to abundant supply currently. Generally, facing the competition of trade war and market supply & demand, imported soybean distribution markets may largely remain stable from fluctuations.
Cottonseed: Cottonseed steps down partially by 0.01-0.06 yuan/kg today due to its weak by-product markets and oil mills’ (some have stopped their purchase) caution against purchasing high-priced cottonseed amid thin crush margins and increased amount of new cottonseed on the market. But the cottonseed market is still supported by ongoing trade conflicts and small volume from Xinjiang under inconvenient transportation and expensive freight. And the short-term cottonseed market is predicted to fluctuate narrowly, so buyers can just buy on hand-to-mouth basis.
Oils:
Summary: US soybean rose slightly as its output potential might be affected by severe weather. Today soybean oil edges down and palm oil edges up on DCE, while most oil spots stay stable, of which soybean oil loses and palm oil gains partially, both trading flat totally and only attracting some deals at lows. Operation rate remains high in recent weeks due to generous crush profits, and soybean oil stock is sent a historical high again of 1.85 Mln tonnes. Meanwhile, global crude oil falls back, and oil futures still shows signs of adjustments. Therefore, downstream distributors become less active in taking delivery and oil mills also slows down their ex-warehousing speed. Under such an oversupply pattern, oil market is burdened with pressure. However, later soybean imports will be less amid trade war, so there may be large supply gaps at the end of this year or early next year. Given this, oil mills are supporting the price, so domestic oils still have little room for callbacks before the trade spat ends, and may extend the upward trend despite fluctuations at the bottom. Buyers can replenish in batches on the dips.
Soybean oil: GB Grade I soybean oil in domestic coastal areas is mainly quoted at 5,620-5,690 yuan/tonne, down by 10-20 yuan/tonne partially (Tianjin traders 5,630-5,640 yuan/tonne, Rizhao 5,630, Zhangjiagang 5,690 and Guangzhou 5,620).
Palm oil: Palm oil of 24-degree melting point in coastal areas is mainly priced at 4,740-4,790 yuan/tonne, up 10 partially (Tianjin 4,780-4,790, up 10; Rizhao not offered; Zhangjiagang 4,780, up 10; Guangzhou 4,740-4,770; Xiamen not offered).
Imported rapeseed oil: Today imported rapeseed oil market edges up steadily. Its quotation in coastal areas is mainly at 6,390-6,560 yuan/tonne, up 10-20 yuan/tonnes partially (Fujian 6,420; Dongguan Fuzhiyuan, Guangdong 6,490; Fangchenggang Great Ocean, Guangxi 6,450). Forward soybean supply may fall short as trade war is hard to end in near term, during which rapeseed oil will keep trending up despite fluctuations at its bottom. But the upside space of oils is restrained by weak fundamentals, for soybean oil stock has moved to a historical high of 1.85 Mln tonnes. And the market may turn more volatile as there are pieces of news that there might be a meeting between China and the US heads late next month and State Reserve Bureau might dump a 6-million-tonne soybean early next year. Buyers can just wait and make proper replenishment on the dips.
Cottonseed oil: Oil market keeps stable today, for forward soybean supply may fall short amid the trade war. In addition, cottonseed oil has little supply and low prices in recent years so that oil mills are reluctant to sell out. But oils on DCE edge down today amid heavy fundamental pressure from bulk oil, followed by soybean oil spots to lose 10-20 yuan/tonnes. So cottonseed oil has low rising potential due to its limited end demand and an increasing amount of new cottonseed oil on the market. Short-term cottonseed oil market may extend to fluctuate narrowly, and buyers can just buy on a hand-to-mouth basis.
(USD $1=CNY 6.94)
