Today (Nov. 2nd), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean quotation steps down today, of which non-GM Canadian soybean is not offered for out of stock and Russian soybean is quoted lower by 50 yuan/tonne at 3,650 yuan/tonne. And GM soybean is not offered. According to some insiders, President Donald Trump is interested in reaching an agreement on trade with Chinese President Xi Jinping at G20 summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms. An easing trade relation will help reduce later soybean supply tensions, which is bearish to import soybean spots market in China. But the push for settling trade conflicts prompted by US president is regarded as a pathway to?reverse unfavorable position in election on November 6th, and once the Republican wins, it may be a total different story later. Therefore, later market still faces some uncertainties. In general, the distribution market of imported soybean is predicted to fluctuate narrowly to consolidate in its stable pace recently.
Cottonseed: US president’s tweet for trade war hope has pushed cottonseed oil and meal markets into a bearish stance. Besides, oil mills remain cautious in face of poor crush margins and high-priced new cottonseed and most mills have stopped purchasing. So cottonseed price falls by 0.04 yuan/kg today. But there are still uncertainties in trade war and cottonseed from Xinjiang is small in volume under traffic tensions, both of which contribute to limit the decline of cottonseed. In general, cottonseed market may go down on the back of weak oil and meal markets, and buyers can just wait.
Oils:
Summary: In response to US Present Donald Trump’s tweet that there is hope for easing the US-China trade war, US soybean rebounded sharply last night, but oils on the Dalian Commodity Exchange (DCE) slump today. Spots of soybean oil and palm oil follow to decline and trade low as participants are just watching the market. Soybean oil stock has risen to 1.86 Mln tonnes because the operation rate is brought high by healthy crush margins. On the other, some South American oil mills are reselling their soybean to China due to dismal crush profits. And Brazilian soybean is planted at an unprecedented speed, making it possible to be loaded as early as late December. In this context, supply gap of soybean will be far smaller than expected, which is dragging down oil spots to post sharp declines. But the push for settling trade disputes prompted by US president is regarded as a pathway to?reverse unfavorable position in election on November 6th, and once the Republican wins, it may be a total different story later. Therefore, later market still faces some uncertainties. So buyers can just wait or take hand-to-mouth basis.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,380-5,460 yuan/tonne in domestic coastal areas, down by 90-110 yuan/tonne (Tianjin 5440-5,450, Rizhao 5,400, Zhangjiagang 5,460, Guangzhou mostly not offered and some at 5,380).
Palm oil: 24-degree palm oil is mainly priced at 4,510-4,640 yuan/tonne in coastal areas, down by 70-80 yuan/tonne (Tianjin 4,630-4,640, down 70; Rizhao not offered; Zhangjiagang 4,600, down 80; Guangzhou 4,510, down 80; Xiamen not offered).
Imported rapeseed oil: The price declines sharply today, of which it is 6,240-6,410 yuan/tonne in coastal areas. (Fujan 6,370; Guangdong 6,400, down 10; Guangxi 6,350, stable). Soybean supply gap later will be smaller than expected, while soybean oil and rapeseed oil inventories stay at high levels due to high operation rate in oil mills; hence, rapeseed oil market is cracked down and may fluctuate to go down. But the push for settling trade disputes prompted by US president is regarded as a pathway to?reverse unfavorable position in election on November 6th. So there are still uncertainties before the trade deal is signed. Buyers can just wait and replenish on the dips after steady falls.
Cottonseed oil: Oils on the DCE slump in response to US president’s tweet for trade war hope and high supply pressure. Due to a fall of soybean oil spots by 90-110 yuan/tonne, as well as an increased amount of new cottonseed oil amid low end demand, buyers are still watching the market. But oil mills are still reluctant to sell their small stocks at such low prices so that they are just waiting and some have even stopped offering. Upon the fall of soybean oil price, cottonseed oil market may continue its weak trend in the short run.
(USD $1=CNY 6.92)
