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Daily Review on Markets for Oilseeds and Oils in China

2018-10-15 www.cofeed.com
      Today (Oct. 15th), the market for oilseeds and oils in China is shown as follows:

      Oilseeds:

      Imported soybean: Imported soybean is quoted steadily today, where non-GM Canadian soybean levels off at 3,680-3,980 yuan/tonne, and GM imported soybean is not offered. Currently, the ample supply with relative high stocks is dampening the imported soybean market. And its distribution market bears further bearish pressure exerted by its blocked shipment as imported soybean has lost the price advantage due to a narrow price spread with domestic soybean. Merely, US soybean import is now impeded by the worsening US-China trade conflicts, coupled by the basically completion of Brazilian soybean sales after November; hence, soybean arrivals at port will be far lower than previous years from November to January 2019, and importers become quite willing to support prices on worries of inadequate soybean supply in the fourth quarter. Generally, facing the competition of trade war and market supply & demand, imported soybean distributing markets may see no large volatility in near term, and the overall market may largely remain stable from narrow adjustments.

      Cottonseed: Cottonseed steps down partially by 0.01-0.02 yuan/kg today. Currently, oil mills remain cautious about purchasing high-priced cottonseed under dismal crush margin and increasing amount of new cottonseed on the market, and cottonseed oil also sees declines. But in view of the ongoing trade conflicts, the small amount of new cottonseed on the market and small volume from Xinjiang under inconvenient transportation and rising freight, cottonseed market still gets restrained. And the short-term cottonseed market is predicted to trend up in fluctuation. 

      Oils:

      Summary: US soybean rose again last Friday due to the bullish effects in the USDA’s report. Today oils on DCE edge up modestly, and spots of domestic soybean oil and palm oil also gain, seeing some deals at lows yet totally remaining flat. Short-term US soybean may fluctuate within a certain range due to the competition of its harvest in the rainy weather and its demand amid trade conflicts. There is little room for oils spots to run higher under high fundamental pressure, especially as soybean oil stock has hit its highest level of 1.74 Mln tonnes amid the high operation rate in oil mills. But as trade conflicts mount, soybean arrivals at port from November to January 2019 may be 5 Mln tonnes lower than the same period last year, so oil mills and distributors are positive to later market, helping soybean oil trade well at low prices. Therefore, oils market will go upside out of the fluctuation. But the news of the meeting between US and China presidents in late November is bearish to domestic market, so oils market may suffer frequent fluctuations. Buyers are suggested not to force price up and to replenish for a safety stock upon callbacks.
  
      Soybean oil: GB Grade I soybean oil in domestic coastal areas is mainly quoted at 5,770-5,830 yuan/tonne by an increase of 10-20 yuan/tonne (Tianjin traders 5,770-5,780 yuan/tonne, Rizhao 5,770, Zhangjiagang 5,830 and Guangzhou 5,790-5,800).
  
      Palm oil: Palm oil of 24-degree melting point in coastal areas is mainly priced at 4,830-4,900 yuan/tonne, up 30-70 (Tianjin 4,820-4,830, up 30; Rizhao 4,900, up 70; Zhangjiagang 4,830, up 50; Guangzhou 4,830-4,840, up 50; Xiamen 4,880, up 60).

      Imported rapeseed oil: Today imported rapeseed oil price continues to rise. Its quotation in coastal areas is mainly at 6,470-6,640 yuan/tonne, up 20-50 (Zhangzhou Chintex, Fujian not quoted; Dongguan Fuzhiyuan, Guangdong 6,600, up 50, Fangchenggang Maple, Guangxi 1901-300 upon basis). The upside room for imported rapeseed oil is now restricted by the weak fundamentals, for rapeseed oil stock has risen to 370,000 tonnes by 15% in East China, despite a  fall of 5% to 141,000 tonnes in South China. Besides, soybean oil stock has climbed to a historical high of 1.73 Mln tonnes. But rapeseed oil will trend up with fluctuations at its bottom before trade tensions ease. Merely, due to the news of a meeting between US and China presidents late next month, rapeseed oil market may suffer strong volatility, so buyer are suggested not to force prices up and to replenish properly at low upon callbacks.

      Cottonseed oil: Us soybean has another gain yesterday due to the short covering. Today, oils on DCE edge up modestly. The overall stability of cottonseed oil today is attributed to the increase of soybean oil spots by 10-20, plus cottonseed oil mills’ unwillingness to sell out under limited supply and low prices. But in face of the oversupply of bulk oils and its own limited end demand, cottonseed oil price may fluctuate narrowly in the short term, but will still go strong in fluctuation as trade conflicts linger on.

(USD $1=CNY 6.92)