Today (Feb. 27th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price keeps steady with slight declines today, among which non-GM Canadian soybean is not offered for out of stock and the GM old soybean goes down by 10 yuan to 3,970 yuan/tonne, and non-GM Russian soybean is at 3,200 yuan/tonne and the GM is not offered. Presidents of China and the U.S. are expected to meet for a deal in Washington in March after substantial progress has been made. Whilst China will buy additional 10 million tonnes of US soybeans, Brazil is now harvesting its soybeans at a pace faster by 20% than that of last year and far higher than the average of 27% in the past five years; hence, domestic soybean supply is likely to increase later. But domestic market now is negative for tepid trading in distribution markets for imported soybean. In general, the market will likely stay stable to fluctuate at a narrow range recently.
Cottonseed: Cottonseed prices today are stable with a decline of 0.01 yuan/kg. The trade is still not active yet and the purchase is cautious given that the cottonseed crush is under great loss and there has been some stock ahead of holiday in some cottonseed oil mills. However, with cotton ginning mills' mindset to hold onto goods for higher prices as the cottonseed prices are at a low level among these years and the supplies are less and less, in the short run cottonseed is likely to stay stable with weak fluctuations, and buyers are suggested to maintain wait-and-see attitudes for present when the market outlook is still not optimistic.
Oils:
Summary: US soybean fell in overnight trading, and oil futures also point to losses but still stay above the previous close on the Dalian Commodity Exchange today. In the physicals, soybean oil and palm oil broadly reverse their declines to steady in spite of some further falls, both trading a little. Soybean oil inventories have gone up by 2% weekly to 1.34 million tonnes, a pace quicker than expected due to sluggish demand after the festival. And there are also bearish fundamentals. Recent appreciation of the RMB will help lower down import cost. Chinese and the U.S. Presidents are expected to meet to strike a deal after a series of substantial progress made in previous talks. And China will likely buy additional 10 million tonnes of US soybeans. Generally speaking, short-term oil market will have little rebound impetus and will probably fluctuate to adjust on the back of the futures. Buyers can just keep light stockpiles at present.
Soybean oil: GB Grade I soybean oil is priced steadily at 5,580-5,700 yuan/tonne in domestic coastal areas. (Tianjin 5,650-5,660, Rizhao 5,690, Zhangjiagang 5,700, and Guangzhou 5,580).
Palm oil: 24-degree palm oil is mainly priced at 4,460-4,600 yuan/tonne in coastal areas. (Tianjin 4,580-4,590; Rizhao 4,600; Zhangjiagang 4,530; Guangzhou 4,460; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed oil decline today, of which it is 6,420-6,580 yuan/tonne in coastal areas. (Fujian and Guangdong not offered, and Guangxi 6,400). Inventories of soybean oil and rapeseed oil have grown on slack demand for oils. And Chinese importers have bought 15,000 tonnes of crude rapeseed oil for its healthy margins recently. Besides, relationship between China and Canada tend to a good prospect for significant progress in US-China trade talks, so Chinese buyers will likely increase their rapeseed purchase later. Overall, rapeseed oil market will broadly fluctuate, and buyers can just keep light stockpiles while waiting or buying on demand.
Cottonseed oil: Cottonseed oil today stays stable with a decline of 100 yuan/tonne. The market is curbed by the limited blending volume of cottonseed oil, the further decline of soybean oil, and the buyers' cautiousness about market involvement for the U.S.-China trade talks were good, and U.S. will delay tariff increases on China, and there will be a Summit for President Xi and Donald Trump in March to finalize the trade agreement. However, Cottonseed oil mills are waiting for a higher offers given their low operation rates and output. So the downward potential for cottonseed oil is limited and in the short run it's likely to go with weak fluctuations.
(USD $1=CNY 6.70)
