Today (Mar. 1st), 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 3,970 yuan/tonne, and non-GM Russian soybean is 3,200 yuan/tonne and the GM not offered. Domestic soybean supply will likely increase now that South American soybean are coming to market. However, traders still tend to stay aside on account of tepid trading on distribution market and uncertainties in US-China trade talks, although China has offered to buy additional 10 million tonnes of US soybeans, so short-term soybean distribution prices will broadly stay stable to adjust narrowly. In general, the market will likely stay stable to fluctuate at a narrow range recently.
Cottonseed: Cottonseed prices today holds stable after earlier decline. The market is bolstered by the 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. But 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. In the near term cottonseed is likely to stay stable with weak fluctuations, and buyers are suggested to take a hand-to-mouth buying strategy for the moment.
Oils:
Summary: US soybean closed with losses overnight upon a failed Trump-Kim meet and renewed worries over US-China trade talks as a representative from the USTR said that their trade issues with China could not be resolved just by substantial purchases of US products. But rapeseed oil surges by nearly 30% on the Zhengzhou Commodity Exchange (ZCE) triggered by a rumor that the approval of certificates for GMO rapeseed and rapeseed oil have been tightened, and oil futures follow to post sharp rallies on the Dalian Commodity Exchange. In the physicals, soybean oil goes up by 60-130 yuan/tonne and palm oil only by 20-30 yuan/tonne, and the trading volume remains small as buyer are cautious in chasing up the price on account of excessive rises of soybean oil. But oil market may have limited rebound space and may fluctuate time and again on the back of futures since oil inventories have picked up earlier than expected for slack demand after the festival, and buyers are suggested not to force up the price too high.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,690-5,830 yuan/tonne in domestic coastal areas, up by 70-130 yuan/tonne. (Tianjin 5,690-5,700, Rizhao 5,750, Zhangjiagang 5,830, and Guangzhou 5,690).
Palm oil: 24-degree palm oil is mainly priced at 4,580-4,610 yuan/tonne in coastal areas, up by 20-30 yuan/tonne. (Tianjin 4,600-4,610, up 30; Rizhao 4,570, up 20; Zhangjiagang 4,550, up 20; Guangzhou 4,580-4,600, up 30; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed oil sharply go up today, of which it is 6,620-6,780 yuan/tonne in coastal areas, up by 150-200 yuan/tonne. (Fujian and Guangdong not offered, and Guangxi 6,620, up 200). Traders cover their short positions after gains upon uncertainties and rapeseed oil futures post significant rises on the ZCE, as the approval of certificates for GMO rapeseed and rapeseed oil has been tightened and Canada is likely to announce its resolution on an extradition against Meng Wanzhou. But inventories of soybean oil and rapeseed oil have both piled up on weak demand. Besides, Chinese importers have bought 68,000 tonnes of crude rapeseed oil this week for sustained RMB appreciation recently and healthy import margins for rapeseed oil. As import margins have expanded to 400 yuan/tonne after large rises on the ZCE, importers will probably buy in more rapeseed oil. And price spread between domestic rapeseed oil vs soybean oil and rapeseed oil vs palm oil has also been enlarged drastically. Overall, rapeseed oil will see limited rises and may fluctuate on the back of futures, and buyers are suggested not to force up the price excessively.
Cottonseed oil: Cottonseed oil today stays stable with a move of 50 yuan/tonne. Cottonseed oil market is supported by the following factors that the operation rates and output in cottonseed oil mills are both low; market becomes concern again about the U.S.-China trade talks after no agreement reached in U.S. and North Korea leaders' meeting; oils on DCE today pick up greatly. However, with the limited blending volume of cottonseed oil, in the short run cottonseed oil is likely to fluctuate in narrow range. Buyers are suggested to take a hand-to-mouth purchasing strategy.
(USD $1=CNY 6.69)
