Today (Dec. 13th), 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 goes down by 20 yuan/tonne to 4,050 yuan/tonne and Russian soybean is unchanged at 3,400 yuan/tonne, and GM soybean is not offered. The bearish tone get more incisive for an easing supply shortage after China made its first purchase of 500,000 tonnes for 9 vessels with ETD in January to March after the provisional trade truce. In addition, soybean market is now suppressed by the slow shipments in distribution markets. Generally speaking, soybean price in distribution market will run weak in fluctuation amid an easing trade state, 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, in addition to the reduced demand. This is still a constraint to cottonseed market. 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. By the way, China has made a purchase of over 500,000 tonnes of US soybean. 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 higher overnight after China was said to have bought over 500,000 tonnes of soybean by 9-12 cargoes, in addition to a report that China has made a purchase of over 1.5-2.0 Mln tonnes. Oils on the Dalian Commodity Exchange just post weak fluctuations amid little bearish influence. In spots market, soybean oil and palm oil both follow to step down and see a smaller trading volume after rounds of replenishment in the past few days. Oil market is weighed down by the imminent bumper harvest in Brazil and the restart of US soybean imports. However, the market has enjoyed a heavy trading volume after the start of stockpiles before the festivals, and soybean oil stocks have been gradually consumed amid the reduced operation rate for swelling meal inventories. In addition, oil mills are propping up the price in view of severe crush margin losses on the soybean side. Therefore, oil market is now in a state where there is limited room for declines yet also lack of impetus for rises. Generally speaking, oil spots may continue to post narrow fluctuations on the back of the futures, and buyers can just wait on the sidelines.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,020-5,160 yuan/tonne in domestic coastal areas, down by 20-50 yuan/tonne. (Tianjin 5,090-5,100, Rizhao 5,160, Zhangjiagang 5,150, and Guangzhou 5,020).
Palm oil: 24-degree palm oil is mainly priced at 4,080-4,180 yuan/tonne in coastal areas, down by 10 yuan/tonne. (Tianjin 4,170-4,180, down 10; Rizhao not offered; Zhangjiagang 4,170, stable; Guangzhou 4,080 and Xiamen not offered).
Imported rapeseed oil: The price for imported rapeseed oil stays stable to rise today, of which it is 6,250-6,500 yuan/tonne in coastal areas, up by 10-20 yuan/tonne. (Fujian not offered; Guangdong 6,350, up 40; Guangxi 6,300, stable). US soybean closed higher overnight after China was said to have bought over 500,000 tonnes of soybean by 9-12 cargoes with ETD in January to March. The restart of US soybean import is bearish domestic market, but the influence is modest this time as this round of purchase is not for crushers. Besides, oil futures on the Zhengzhou Commodity Exchange has continued to rise today as stockpiles in the run up to the double holidays will get started gradually. But while Brazilian soybean is about to be harvested this weekend after its output forecast was being raised over and over again, domestic soybean oil and rapeseed oil are still bearing heavy pressure from high stocks. Amid the oversupply, short-term rapeseed oil will find limited space to rebound and may suffer risks for callbacks. Buyers can just wait and properly replenish on the dips upon low forward basis.
Cottonseed oil: Cottonseed oil price is stable today as oil mills are propping up the price on account of small output and low price, as well as the start of stockpiles in the run up the festivals. But this is bearish to domestic market so that soybean oil steps down by 20-50 yuan/tonne amid the oversupply pattern, and there is still limited blend demand for cottonseed oil. Overall, short-term cottonseed oil will likely post weak fluctuations, and buyers can just take hand-to-mouth buying.
(USD $1=CNY 6.87)
