Daily Review on Markets for Oilseeds and Oils in China
Today (Feb. 1st), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Cottonseed: The cottonseed market holds steady due to the cautious purchase of oil mills for stockpiling under the conditions of the cottonseed crush losses as well as the decreased demand factored in the machine halt in more and more oil mills for the upcoming Spring holiday. However, China's cottonseed market is supported by the low trading of cotton ginning plants in view of less and less cottonseed supply and the prices which is at the low level of recent years. Cottonseed prices in the short run are likely to fluctuate in narrow range. Besides, the trade talks has just finished, making some progress, and there will be another trade talks in mid-February.
Oils:
Summary: Soybean futures post gains on the Globex upon President Trump’s statement that the US has made substantial progress in this round of trade talks with China and China will purchase another 5.0 Mln tonnes of soybean. But this is bearish to domestic market so that oil futures inch lower on the Dalian Commodity Exchange today. And on the spot market, soybean oil and palm oil both post partial losses in light trading. Currently, traders are active in the arbitrage of buying oils and selling meals upon a slump in live hog amount under the rampant ASF, a sharp drop in soybean oil stockpiles amid stockpile for the festival and underlying tension of soybean supply at the end of first quarter. With oil mills propping up prices, short-term oil market will have little room for callbacks. By the way, there will be a new round of trade talks between China and the US in mid-February when the two countries may manage to decide on final results, before which there will be few changes in oil market.
As factories have almost closed for the imminent Spring Festival, soybean oil and palm oil are not offered today.
Imported rapeseed oil: The price for imported rapeseed oil steps down by 20-30 yuan/tonne to 6470-6630 yuan/tonne. Currently, traders are active in the arbitrage of buying oils and selling meals as meal price may fall bearish upon frequent outbreaks of the ASF. In addition, oil mills have bought very few rapeseed cargoes for shipment after March due to tensions between China and Canada, so soybean and rapeseed supply may get tight at the end of this quarter. Overall, rapeseed oil market may remain resilient and have little room for declines, and will probably post narrow fluctuations before the Spring Festival.
Cottonseed oil: Cottonseed oil prices are a little bit high due to oil mills' mindset to hold onto goods as prices of cottonseed oil hit a low of recent years with limited output, especially for most oil mills in Xinjiang province who stop trading in consideration of low prices. However, the China's oils market is negative due to the optimistic result from the China-US trade talks that just finished. And the cottonseed oil market is curbed by its low demand in the wake of the ending of stockpiling ahead of holiday. All in all, cottonseed oil is still likely to remain stable with good momentum for growth ahead of the holiday.
(USD $1=CNY 6.73)
