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Daily Review on Markets for Oilseeds and Oils in China

2018-12-10 www.cofeed.com
      Today (Dec. 10th), 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. Soybean market is now supported by its small supply in distribution market, especially when there is no arrival at ports recently. However, China has begun preparing to purchase US soybean, with state bureau being the bellwether. Negative sentiment amid the US-China trade detente has been reinforced so that soybean shipments in distribution market are slower down, which weighs down the market further. Generally speaking, soybean price in distribution market will run weak in fluctuation, and investors can keep watching national policy moves.  
 
      Cottonseed: Oil mills find it hard to move on amid continuing weak performance of cottonseed by-products, especially cottonseed meal so that they become less willing to turn on their machines. Due to the reduced demand, cottonseed market gets curbed. 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 closed with gains last Friday as China and the US worked to propel trade deals. Oils fall on the Dalian Commodity Exchange (DCE) today, but the practical decline is minor. In spots market, domestic soybean oil steps down and palm oil fluctuates, both trading a little. Brazilian soybean is about to enter harvests with its output forecast being raised once and again. In addition, China is rumored to purchase some 5.0 Mln tonnes of US soybean. Therefore, aside from its own ongoing oversupply, domestic oil market has also been cracked down by weak fundamentals. But the crush volume of soybean has further reduced to 1.67 Mln tonnes last week as operation rate has dropped for slow consumption of soybean meal. In this context, soybean oil stock has decreased to around 1.75 Mln tonnes. Moreover, stockpiles in the run up to festivals will start gradually in mid-to-late December. Therefore, oil market will be restricted from further declines. Generally, short-term oil spots will likely follow its futures to post weak fluctuations, and buyers can just wait to replenish properly on the dips after steady falls. 
 
      Soybean oil: GB Grade I soybean oil is mainly priced at 5,130-5,280 yuan/tonne in domestic coastal areas, down by 10-80 yuan/tonne. (Tianjin 5,210-5,220, Rizhao 5,260, Zhangjiagang 5,280, and Guangzhou 5,130-5,150).
 
      Palm oil: 24-degree palm oil is mainly priced at 4,140-4,320 yuan/tonne in coastal areas, fluctuating by 20-40 yuan/tonne. (Tianjin 4,250-4,260, down 20; Rizhao 4,320, up 40; Zhangjiagang 4,230, down 20; Guangzhou and Xiamen not offered). 
 
      Imported rapeseed oil: The price for imported rapeseed oil basically stays stable today, of which it is 6,220-6,480 yuan/tonne in coastal areas. (Fujian not offered; Guangdong 6,320; Guangxi 6,230). Last week, rapeseed oil stocks have dropped by 10% to 130,000 tonnes in South China and also dropped fractionally to 420,000 tonnes in East. And the stockpiles in the run up to the New Year’s Day and Chinese Spring Festival will gradually start in mid-to-late December. In this regard, rapeseed oil market will get a boost. But prices for soybean oil and palm oil fluctuate to slide continuously for their high inventories amid the trade detente, and rapeseed oil price is hard to outshines them. Therefore, short-term rapeseed oil will have limited room for further rebounds, and may suffer some risks of pullbacks after a wave of rebounds. Buyers are suggested not to force up the price excessively and can await for callbacks to replenish on the dips. 
 
      Cottonseed oil: Cottonseed oil price keeps steady today, for oil mills are propping up the price on account of small output of cottonseed oil and its low prices, as well as the uncertainties in trade frictions. But US soybean closed with gains last Friday as the market is expected the US and China to reach a trade deal. Today, soybean oil steps down on the DCE, and its spots also fall by 10-80 yuan/tonne, and thus, cottonseed market is curbed amid its light trading volume under limited blend demand. Overall, short-term cottonseed oil may go weak in fluctuation. By the way, buyers can just wait as China is said to purchase some 5.0 Mln tonnes of US soybeans. 
 
(USD $1=CNY 6.88)