Today (Dec. 11th), 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 to ports recently. However, Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary and Trade Representative today to discuss the road map for the next stage of their trade talks. And last week, Ministry of Finance officials led the meeting to discuss restarting US soybean imports. After this, a Bloomberg report said that China intends to announce this month the first batch of U.S. soybean purchases and details are held to be decided. Negative sentiment amid the US-China trade detente has been reinforced so that soybean shipments in distribution market are slowed down, which has further undermined the market. 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 continued weak performance of cottonseed by-products, especially cottonseed meal so that they become less willing to power on their machines. Due to the reduced demand, cottonseed market steps down by 0.02-0.04 yuan/tonne partially. 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 losses last night due to position adjustments ahead of the report release. Soybean oil posts another large drop on the Dalian Commodity Exchange (DCE) today. In spots market, soybean oil and palm oil both decline and trade less than yesterday. Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary and Trade Representative today to discuss the road map for the next stage of their trade talks. And last week, Ministry of Finance officials led the meeting to discuss restarting US soybean imports. After this, a Bloomberg report said that China intends to announce this month the first batch of U.S. soybean purchases and details are held to be decided. Brazilian soybean will be harvested soon with its output forecast being hiked straightly, whilst domestic oil supply still exceeds the demand, dragging down oil market to dive endlessly. However, stockpiles before the New Year’s Day and Chinese Spring Festival will be carried out gradually in mid-to-late December. Soybean oil saw a trading volume of 70,000 tonnes yesterday and most contracts were signed at lows upon basis in January. Generally speaking, short-term oil spots will continue to show weak fluctuations after its futures in the absence of bullish factors, and buyers can take hand-to-mouth buying and purchase properly at lows upon far-month basis.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,050-5,180 yuan/tonne in domestic coastal areas, down by 50-80 yuan/tonne. (Tianjin 5,150, Rizhao 5,180, Zhangjiagang 5,160, and Guangzhou 5,050-5,060).
Palm oil: 24-degree palm oil is mainly priced at 4,080-4,200 yuan/tonne in coastal areas, down by 30-60 yuan/tonne. (Tianjin 4,200, down 40; Rizhao not offered; Zhangjiagang 4,200, down 30; Guangzhou 4,080, down 60 and Xiamen not offered).
Imported rapeseed oil: The price for imported rapeseed oil steps down today, of which it is 6,210-6,430 yuan/tonne in coastal areas, down by 30-50 yuan/tonne. (Fujian not offered; Guangdong 6,300; Guangxi 6,250). 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 the 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 has got a boost. But prices for soybean oil and palm oil fluctuate to slide continuously for their high inventories amid the trade detente so that 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, in addition that the US-China trade war is yet to finish. But US soybean closed lower last night, and today, soybean oil posts another drop on the DCE, and its spots also fall by 50-80 yuan/tonne, and thus, cottonseed market is curbed amid its light trading volume under limited blend demand. By the way, Vice Premier Liu He had a phone conversation with U.S. Treasury Secretary today to propel the trade negotiations. Overall, short-term cottonseed oil may go weak in fluctuation, and buyers can just wait on the sidelines.
(USD $1=CNY 6.90)
