Today (Dec. 7th), 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. The US-China trade talks get cloudy after the arrest of CFO of the Chinese telecom giant Huawei. Meanwhile, investors are still waiting for the confirmation on news that US is going to export agriculture products to China. In addition, the future of the trade war is quite uncertain and may even escalate as China and the US may impose tit-for-tat tariff if they cannot reach a deal within three months. In general, the overall distribution market of imported soybean will be in wait-and-see sentiment and may steadily fluctuate to adjust recently.
Cottonseed: Oil mills are hard to move on under ongoing poor performance of cottonseed oil and meal so that they are hesitant to purchase and some have already powered off their machines. In this context, cottonseed market falls bearish and steps down by 0.02 yuan/kg today. However, the volume available from Xinjiang to other parts of China is small when ginning plants are reluctant to sell, in addition to high freight cost; hence, the price will not drop further. Overall, short-term cottonseed market will probably present narrow fluctuations to go weak amid the trade truce, and buyers can just wait on the sidelines.
Oils:
Summary: US soybean shed its gains to down last night amid fears that the arrest of Huawei CFO would reignite the US-China trade tensions. However, the Ministry of Commerce said Beijing is confident in clinching a deal with Washington with 90 days, and US President Donald Trump also tweeted “the teams of both sides are now having smooth communications”, so today oils on the Dalian Commodity Exchange (DCE) fluctuate to fall with losses enlarged gradually. In spots market, domestic soybean oil and palm oil both step down and trade scarcely. Brazil is to harvest its soybean from the second half of this month with the output forecast being raised constantly now. Moreover, oil supply still exceeds the demand in China and stockpiles before festivals are yet to unfold. In the meantime, palm oil stock may record a new high of 3.0 Mln tonnes by the end of November in Malaysia. Therefore, short-term oil spots may extend weak fluctuations on the back of futures, and buyers just wait on the sidelines.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,170-5,350 yuan/tonne in domestic coastal areas, down by 20-50 yuan/tonne. (Tianjin 5,250-5,260, Rizhao 5,340, Zhangjiagang 5,350, and Guangzhou 5,170-5,200).
Palm oil: 24-degree palm oil is mainly priced at 4,130-4,290 yuan/tonne in coastal areas, down 30-60 yuan/tonne. (Tianjin 4,280-4,290, down 40; Rizhao 4,290, down 60; Zhangjiagang 4,250, down 30; Guangzhou 4,130, down 40; Xiamen not offered).
Imported rapeseed oil: The price for imported rapeseed oil goes up today, of which it is 6,220-6,480 yuan/tonne in coastal areas, up 30-50 yuan/tonne (Fujian not offered; Guangdong 6,320, up 20; Guangxi 6,230, up 30). US soybean reversed to slip on worries for the US-China relationship after the arrest of Huawei CFO. In China, rapeseed oil futures on Zhengzhou Commodity Exchange are buoyed to extend rises. For one thing, global rapeseed supply may get some impact as Canada has reduced its rapeseed output forecast whilst the European Union is also threatened by droughts. For another, the market fears that the Huawei arrest will cast a shadow over the relationship between China and Canada, and rapeseed oil is rumored to witness some violation of vessels. But both soybean oil and rapeseed oil are facing pressure from high inventories. In addition, the Ministry of Commerce said Beijing is confident in clinching a deal with Washington with 90 days, and US President Donald Trump also tweeted “the teams of both sides are now having smooth communications”. Therefore, there is still limited space for rapeseed oil to rebound in the near term amid the trade detente.
Cottonseed oil: Cottonseed oil price keeps steady today, for oil mills are propping up the price on account of the uncertainties in trade frictions, together with small output of cottonseed oil and its low prices. But US soybean slid over the cloudy future of the US-China trade talks after the arrest of Huawei CFO Meng Wanzhou, and soybean oil also slips on the DCE today. Soybean oil spots decline by 20-50 yuan/tonne, but cottonseed oil market is still negative as its new deals are hardly observed for its low blend demand. Overall, short-term oil market may fluctuate to weaken and buyers can just wait and see.
(USD $1=CNY 6.87)
