Today (Dec. 4th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price keeps steady today, among which Non-GM Canadian soybean is not offered for out of stock, Russian soybean is 3,400-3,450 yuan/tonne, and GM soybean is not offered. What’s more even concerning is whether there will be any official news that the 28% of soybean import tariffs will be restored to 3% now that China has agreed to purchase US agricultural products. If the tariff is restored, distribution market of imported soybean will probably slump; but if not, the market will edge up under tight supply. In such an uncertain case, distribution market of imported soybean will largely stay stable to fluctuate narrowly in the short term.
Cottonseed: Domestic oil and meal markets fall bearish due to a temporary easing state of trade war after the meeting between the US and Chinese presidents. Oil mills remain cautious in purchasing and some have even stopped to purchase during rough market. Therefore, cottonseed price falls by 0.01-0.06 yuan/kg under bad performance. But the overall price decline is restricted under a small volume from Xinjiang under traffic tensions and expensive freights and ginning plants’ sentiment in hoarding to support the price. On the whole, short-term cottonseed market will probably fluctuate narrowly to go weak, and buyers can take hand-to-mouth buying.
Oils:
Summary: For the trade truce between the US and China, US soybean extended to gain overnight, but oils on the Dalian Commodity Exchange (DCE) fluctuate to edge down amid bad market sentiment. In spots market, domestic soybean oil remains broadly stable with some fluctuations, while palm oil mostly steps down and trades low. The Secretary of USDA said that China would restored US soybean import after China had agreed to purchase US agriculture product immediately. In the meantime, oil market is still under pressure amid the oversupply of domestic oils. But the trade friction has not been resolved thoroughly, and it may escalate if the two countries fail to reach a trade deal before March next year. Besides, it still remain unknown whether the US soybean import tariff will be reverted to 3% from current 28%. Additionally, the stockpile for small packing oil will gradually start mid-to-late this month. Therefore, there is little room for oils to decline. As domestic market is still digesting the bearish impact from the trade detente, short-term oil will likely fluctuate to go weak. Buyers can take hand-to-mouth basis on account of the uncertainties in trade disputes.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,240-5,420 yuan/tonne in domestic coastal areas, fluctuating by 10-20 yuan/tonne partially. (Tianjin 5,330-5,340, Rizhao 5,400, Zhangjiagang 5,420, and Guangzhou 5,240).
Palm oil: 24-degree palm oil is mainly priced at 4,160-4,330 yuan/tonne in coastal areas, mostly down 10-50 yuan/tonne. (Tianjin 4,320-4,330, down 10; Rizhao 4,330, down 10; Zhangjiagang 4,280, down 30; Guangzhou 4,160, down 10; Xiamen 4,250, down 50).
Imported rapeseed oil: The price for imported rapeseed oil stays stable to edge down today, of which it is 6,120-6,350 yuan/tonne in coastal areas, down by 10-20 yuan/tonne partially. (Fujian not offered; Guangdong 6,250, down 20; Guangxi 6,150, down 30). Oil oversupply still maintains amid the high inventories of soybean oil and rapeseed oil. Meanwhile, the market is still digesting the bearish impact from the trade detente. Therefore, short-term rapeseed oil market will remain weak in fluctuations. But the stockpile for small packing oil will gradually start. And it is still uncertain whether China and the US will reach a deal within three months. In this case, there will be no further price slump as oil mills are supporting the price. Buyers can just wait and replenish properly when the quotation falls steadily.
Cottonseed oil: Oils on the DCE continue to fall in fluctuations amid the trade detente. Soybean oil spots fluctuate by 10-20 yuan/tonne, and cottonseed oil steps down by 50 yuan/tonne for its limited blend demand under the bulk oil glut. But the future of trade spats is still uncertain. In addition, cottonseed oil is in small output and low prices, so its decline is limited. On the whole, cottonseed oil market may maintain weak fluctuations in the short term, and market participants can keep watching whether China is to restore US soybean import or not.
(USD $1=CNY 6.84)
