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Daily Review on Markets for Oilseeds and Oils in China

2018-10-17 www.cofeed.com
      Today (Oct. 17th), the market for oilseeds and oils in China is shown as follows:

      Oilseeds:

      Imported soybean: The quotation for imported soybean remains unchanged today, where non-GM Canadian soybean levels off at 4,050 yuan/tonne, and GM imported soybean is not offered. US soybean import is now reeling from 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 7 Mln tonnes in November. The volume will be less than 12 Mln tonnes in December and January together, which is far lower than that of the same period last year. Importers have a strong will to support the price as market participants show concerns over the soybean supply in later market. Nevertheless, the price advantage of imported soybean turns invisible due to its narrowed spread with domestic soybean, so its shipment is blocked. Besides, imported soybean is still in liberal supply currently. Therefore, the overall market is curbed. Generally, facing the competition of trade war and market supply & demand, imported soybean distributing markets may largely remain stable from fluctuations.

      Cottonseed: The increased amount of new cottonseed on the market is hard to fulfill the orders from ginning factories, especially under the ongoing trade war and trivial volume of cottonseed from Xinjiang due to the traffic tensions and expensive freight; therefore, cottonseed market is stable. But refineries are cautious about purchasing high-priced cottonseed under dismal crush profits and increased new cottonseed, coupled by the relatively weak market of other by-products (except cottonseed meal), so cottonseed market is still restricted. In general, short-term market is predicted to fluctuate narrowly, so buyers can just buy on a hand-to-mouth basis. 

      Oils:

      Summary: US soybean fell sharply overnight on clear weather and weakened exports. Today, oils on DCE continue the callbacks, with soybean oil and palm oil spots to lose 20-60 and trade flat. Crude oil futures fall again after OPEC declared to balance the oil market. In addition, soybean oil still holds large inventories under the ultrahigh operation rate in refineries. Therefore, oil market is forced to have callbacks. But later arrival of soybean at port will be less amid the trade war, which may cause supply tensions from December to February, so oil market is predicted to have little room to fall in the short run, and will keep going up from fluctuation amid the trade spat. And the market is now in volatile adjustments, so buyers can just wait on the sidelines, or buy on a hand-to-mouth basis. 
  
      Soybean oil: GB Grade I soybean oil in domestic coastal areas is mainly quoted at 5,610-5,680 yuan/tonne, down by 40-60 yuan/tonne partially (Tianjin traders 5,610-5,620 yuan/tonne, Rizhao 5,640, Zhangjiagang 5,680and Guangzhou 5,630).

      Palm oil: Palm oil of 24-degree melting point in coastal areas is mainly priced at 4,720-4,820 yuan/tonne, mostly down by 20-40 yuan/tonne (Tianjin 4,770-4,780, stable; Rizhao 4,810-4,820, down 20; Zhangjiagang 4,750, down 30; Guangzhou 4,720, down 40; Xiamen not quoted).

      Imported rapeseed oil: Imported rapeseed oil prices step down today, among which the quotation in coastal areas is 6,360-6,530 yuan/tonne, down 30-50 yuan/tonne (Fujian not offered; Dongguan Shenheng, Guangdong 6,360; Fangchenggang Maple 6,380). Domestic soybean oil and rapeseed oil stocks are on the rise amid the slack season, whose oversupply pattern is dragging on the rapeseed oil market at present. But the deteriorating US-China relations will escalate the trade conflicts, which will finally make a dent in forward soybean supply. Under such circumstances, market participants are positive to later market, so rapeseed meal will keep trending up from fluctuations. And the shocks may be frequent recently due to the news of a possible meeting between the US and China heads, so buyer can just buy on a hand-to-mouth basis.
 
      Cottonseed oil: The overall oil market is propped up by the inadequate forward soybean supply under ongoing trade conflicts. Besides, oil mills are reluctant to sell out under limited supply and low prices seen in years. So cottonseed oil price keeps stable. But the sharp slump of US soybean last night, together with weak crude oil market and high pressure of oil fundamentals, continues the callbacks of oils on DCE today. A loss of soybean oil spots by 40-60 yuan/tonne makes it hard for cottonseed oil to edge up under its low end demand, especially when new cottonseed oil is on the rise. Overall, short-term cottonseed oil market may fluctuate narrowly.
 
(USD $1=CNY 6.94)