Today (Dec. 12th), 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, 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 0.01 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 erased its loss to edge up last night as the US-China trade talks had overshadowed the bearish report from USDA. Today, oils on the Dalian Commodity Exchange (DCE) slow their declines significantly. In spots market, domestic soybean oil and palm oil mostly erase their losses to steady with some fluctuations and are predicted to complete a high trading volume at lows. Currently, trade negotiations go along well between China and the United States. Meanwhile, USDA has raised its output forecast to a record of 122 Mln tonnes for Brazilian soybean, which is about to be harvested soon. Such bearish fundamentals have continued to weigh on oil market. However, stockpiles in the run up to the festivals have gradually got started, for which soybean oil has seen a continuously strong trading volume for two days, mostly clinched on the basis of January at lows. Moreover, operation rate has also dropped constantly for swelling soybean meal inventories so that soybean oil stock has decreased to around 1.74 Mln tonnes. In addition, oil mills tend to prop up the price on account of heavy crush margin losses on the soybean side. Seen from this, there is limited space for further declines in oil market. Generally speaking, short-term oil spots will post narrow fluctuations on the back of its futures, and buyers are suggested to make proper replenishment on the dips and be careful in chasing up the price.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,050-5,180 yuan/tonne in domestic coastal areas, fluctuating by 20-40 yuan/tonne. (Tianjin 5,130-5,140, Rizhao 5,180, Zhangjiagang 5,150, and Guangzhou 5,050-5,060).
Palm oil: 24-degree palm oil is mainly priced at 4,060-4,200 yuan/tonne in coastal areas. (Tianjin 4,190-4,200, unchanged; Rizhao not offered; Zhangjiagang 4,170; Guangzhou 4,060-4,080 and Xiamen not offered).
Imported rapeseed oil: The price for imported rapeseed oil goes up today, of which it is 6,270-6,490 yuan/tonne in coastal areas, up by 30-50 yuan/tonne. (Fujian not offered; Guangdong 6,340, up 40; Guangxi 6,300, up 50). US soybean edged up last night as the smooth US-China trade talks had overshadowed the bearish report from USDA. And the market is worried about the relationship between China and Canada after the former Canadian diplomat, Michael Kovrig, has been detained in China. Meanwhile, stockpiles in the run up to the festivals have gradually got started. Therefore, rapeseed oil market has got a boost. However, high inventory pressure still exists among soybean oil and rapeseed oil so that the oversupply pattern of domestic oils still continues. In addition, the US and China have been in an easing trade state, whilst the output forecast for Brazilian soybean has been raised over and again. Generally, rapeseed oil will find limited room for rebounds in the short term, and buyers can just take hand-to-mouth buying, and replenish properly on the dips upon the forward basis.
Cottonseed oil: Soybean oil spots mostly erased losses to steady with some fluctuations of 20-40 yuan/tonne, and cottonseed oil price stays stable today as oil mills are propping up the price in consideration of the small output and low price, in addition to the start of stockpiles before the festivals. But the market is still curbed by its low trading volume under limited blend amount amid the oversupply pattern of bulk oils. Overall, short-term cottonseed oil may fluctuate to go weak amid the easing trade state, and buyers can take hand-to-mouth buying.
(USD $1=CNY 6.89)
