Today (Jan. 24th), 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 and the GM old soybean is unchanged at 4,000 yuan/tonne, and non-GM Russian soybean is at 3,200 yuan/tonne and the GM is not offered. US soybean futures fell on an uncertain outlook of trade talks between China and the United States. Meanwhile, global soybean supply is relatively loose at present, and domestic soybean market is still damped by sluggish shipments on the distribution market. Overall, imported soybean price will likely stay stable with slight declines in distribution market recently.
Cottonseed: The cottonseed market is curbed by the cautious purchase of oil mills for stockpiling under the conditions of the serious cottonseed crush losses as well as the decreased demand for oil mills get ready for a machine halt when Lunar New Year is around the corner. However, China's cottonseed market is supported by the low trading of cotton ginning plants in view of less and less cottonseed supply and its current low prices as well as expensive freight. All in all, for the prices of products in downstream is more likely to rise than fall, short-term cottonseed is likely to strongly fluctuate. Oil mills may make small replenishment upon low prices if out of stock.
Oils:
Summary: U.S. soybean rebounded last night for dry weather in Brazil, and oil futures edge up on the Dalian Commodity Exchange today. On the spots market, soybean oil and palm oil both go up to attract some procurement at low prices. Oil market has been embracing better fundamentals recently. On one hand, soybean oil inventories have slumped to about 1.40 Mln tonnes. And soybean arrivals have declined by 21% in the first quarter compared with a year earlier, which may lead to supply tensions from March to the first half of April. On the other, operation rate for rapeseed has been low in oil mills for its customs clearance is choked by strained tensions between China and Canada. In particular, the market confidence is buoyed by the arbitrage of buying oils and selling meals among traders, who have taken this for a possible 20% drop in live hog numbers amid the rampant African swine fever. To give an example, a Jiangsu factory clinched a deal of 30,000 tonnes yesterday upon basis in March. Thus it can be seen that the market is bullish about later trend of oils. Overall, oil market will probably go up rather than trend lower before the Spring Festival, and will have little space for callbacks. And buyers are suggested not to force up the price, but to make proper replenishment on the dips after callbacks.
Soybean oil: GB Grade I soybean oil is priced at 5,620-5,720 yuan/tonne in domestic coastal areas, mostly up by 10-20 yuan/tonne. (Tianjin 5630-5640, Rizhao 5,660, Zhangjiagang 5,720, and Guangzhou 5,620).
Palm oil: 24-degree palm oil is mainly priced at 4,630-4,680 yuan/tonne in coastal areas, up by 20-30 yuan/tonne. (Tianjin 4,670-4,680, up 20; Rizhao not offered; Zhangjiagang 4,680, up 30; Guangzhou 4,630, up 30; and Xiamen not offered).
Imported rapeseed oil: The price for imported rapeseed oil trends up today, of which it is 6,470-6,610 yuan/tonne in coastal areas, up by 10-30 yuan/tonne. (Fujian not offered; Guangdong not offered; and Guangxi 6,500, up 30). Rapeseed oil has seen declines in its output for rapeseed shortage since eight cargoes of rapeseed are still not allowed to be processed amid tensions between China and Canada. Moreover, traders are active in taking the arbitrage of buying oils and selling meals for downturns in meal prices as hog breeding is hit hard by the contagious African swine fever. Rapeseed oil market is thus boosted to trend higher. But there are still some bearish fundamentals, ranging from heavy pressure in global soybean supply to growing crude oil imports amid improving margins. On the state side, the United States will probably proceed with the formal extradition from?Canada?of Huawei Meng Wanzhou ahead of the deadline for filing, which will?ratchet up tensions between China and Canada if approved. It is a move certain to exert impact on imports of rapeseed and rapeseed oil. Amid uncertainties in trade talks between China and the United States, buyers had better not force up the price excessively while waiting for guidance from updates.
Cottonseed oil: Today soybean oil spots mostly go up 10-20 yuan/tonne. And cottonseed oil prices are a little bit high due to oil mills' mindset to hold onto goods, especially for oil mills in Xinjiang province who stop trading in consideration of low prices, as the stockpiling ahead of the holiday is still underway, and prices of cottonseed oil hit a low of recent years with limited output. However, China's oils market is negative for there will be a higher-level US-China negotiation at the end of this month. Moreover, there is no obvious trading volume of cottonseed oil when buyers maintain cautious about market involvement. So cottonseed oil may go strong ahead of the holiday.
(USD $1=CNY 6.79)
