Today (Nov. 6th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean quotation stays stable to fall today, of which non-GM Canadian soybean is not offered for out of stock and Russian soybean goes down by 10 yuan/tonne against yesterday at 3,590 yuan/tonne. And GM soybean is not offered. In view of a somewhat easing state in US-China trade frictions, soybean supply tension later may be lower than anticipated, which brings bearish pressure to the distribution market of imported soybean. However, the market now still gets supports from the tight supply of soybean at ports since the import volume is still less recently. On the whole, the distribution market of imported soybean may stay stable to have narrow adjustments. And market participants can keep monitoring the US mid-election result, which may affect President Trump’s attitude towards trade talks. Currently, a poll showed that the Republican may lose the House of Representatives to hold the Senate.
Cottonseed: Cottonseed falls by 0.08 yuan/kg, which can be contributed to the weak performance in its oil and meal markets and oil mills’ caution against high-priced cottonseed amid to poor crush margins and the increased amount of new cottonseed (most oil mills have already stopped purchasing). But there are uncertainties in the trade war. Besides, the cottonseed volume from Xinjiang is restricted by traffic tensions and expensive freights, which also limits the declines of mainland cottonseed market. In general, cottonseed market may go weak to consolidate in the short run, and buyers can just wait.
Oils:
Summary: US soybean was burdened with harvest pressure to edge down last night. Today, oils on the Dalian Commodity Exchange (DCE) fluctuate narrowly. And soybean oil spots go up partially while palm oil spots go down largely to trade low. Operation rate was brought down last week by swollen inventories of soybean meal, so soybean oil stocks have dwindled to 1.84 Mln tonnes. But due to the weak end demand and slow delivery among oil mills, the oversupply pattern still remains. And in South America, some oil mills, in view of dismal crush margins, are reselling their soybeans for ETD of December; and Brazilian farmers have seeded 60% soybean acreage, far higher than a five-year mean of 41%, making it possible for early-maturing soybean to be loaded in late December. In the context, soybean supply gap may be far smaller than anticipated, which is bearish to oil market. The market may fluctuate wildly after the US midterm elections start today. On the whole, oil market may follow futures to fluctuate frequently in the short term and may post a weak trend by the end of November. And buyers can just take hand-to-mouth basis amid awaiting the election result and the guidance in USDA’s report on Thursday.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,440-5,500 yuan/tonne in domestic coastal areas, down by 10-20 yuan/tonne partially (Tianjin 5,480-5,490, Rizhao 5,450, Zhangjiagang 5,500, Guangzhou 5,440).
Palm oil: 24-degree palm oil is mainly priced at 4,500-4,630 yuan/tonne in coastal areas, down by 20-30 yuan/tonne largely (Tianjin 4,620-4,630, down 20; Rizhao not offered; Zhangjiagang 4,580, down 20; Guangzhou 4,500, down 30; Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil price stays stable to edge down today, of which it is 6,120-6,330 yuan/tonne, down by 10 yuan/tonne partially (Fujian 6,340 yuan/tonne, Guangdong 6,330, Guangxi 6,250, stable). While domestic rapeseed oil stocks have increased to 530,000 tonnes by 2% weekly and soybean oil stocks also hover near a historical high in spite of some declines, the end demand remains low and oil mills are slow in shipping. However, there are still uncertainties in the trade war, and December will enter the peak season for stockpiling of small packing oil; thus the room for declines is limited. On the whole, rapeseed oil market will likely fluctuate frequently before the meeting between the US and Chinese presidents, so buyers are suggested to replenish on the dips for a safety stock, but not to force up the price.
Cottonseed oil: Cottonseed oil plays catch up with declines at highs, for its market is slashed by large inventories of bulk oils and its limited end demand amid an increased amount of new cottonseed oil on the market. But oils on the DCE today fluctuate to adjust, and soybean oil spots rise by 10-20 yuan/tonne partially. Besides, oil mills are still supporting the price and some even stop to offer due to limited supply. In general, short-term cottonseed oil may fluctuate frequently on the back of soybean oil, and market participants are suggested to give attention to the US midterm elections tonight.
(USD $1=CNY 6.92)
