Today (Mar. 4th), 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. In addition, However, traders still tend to stay aside on account of tepid trading on distribution market. And a foreign report said that China and the United States are much closer to a deal. China is offering to lower tariffs on U.S. agricultural products and the United States is considering eliminating most if not all of the trade sanctions imposed on Chinese products last year. Both sides will meet for a fresh round of talks in Beijing on March 14 and 15, and two presidents will meet sign a deal on around March 27th. But traders still tend to stay aside on account of tepid trading on distribution market. 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 0.01-0.1 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 supplies are not much and cottonseed oil today picks up with bulk oils, in the short run cottonseed is likely to fluctuate weakly, and buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: A foreign report said that China and the United States are much closer to a deal. China is offering to lower tariffs on U.S. agricultural products and the United States is considering eliminating most if not all of the trade sanctions imposed on Chinese products last year. Both sides will meet for a fresh round of talks in Beijing on March 14 and 15, and two presidents will meet sign a deal on around March 27th. This news brought US soybean to inch higher last Friday. Domestically, oil futures also point to gains on the Dalian Commodity Exchange today thanks to the arbitrage of buying oils and selling meals, for soybean crush will fall to 1.55 Mln tonnes and 1.63 Mln tonnes respectively in the next two weeks as more and more oil mills are forced to power off their equipment by swelling soybean meal inventories due to low demand from large drops in live pig number under the contagious ASF. In the physicals, soybean oil and palm oil both go up with some deals at low prices, but the total trading volume is small as there are few deals for those with big price rises. Rapeseed oil has pointed to largest rises on the Zhengzhou Commodity Exchange due to the strict process for getting the approval of certificates for GMO rapeseed and its by-products. Overall, the upward space may be restricted by growing oil inventories under slack demand after the festival, so buyers are suggested not to force up prices excessively.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,730-5,860 yuan/tonne in domestic coastal areas, up by 40-90 yuan/tonne. (Tianjin 5,800-5,810, Rizhao 5,800, Zhangjiagang 5,860, and Guangzhou 5,730).
Palm oil: 24-degree palm oil is mainly priced at 4,570-4,680 yuan/tonne in coastal areas, up by 70-100 yuan/tonne. (Tianjin 4,670-4,680, up 70; Rizhao 4,670, up 100; Zhangjiagang 4,650, up 100; Guangzhou 4,570, up 70; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed meal sharply go up today, of which it is 6,670-6,840 yuan/tonne in coastal areas, up by 90-120 yuan/tonne. (Fujian and Guangdong not offered and Guangxi 6,800, up 120). The market rumored that several Canadian enterprises are disqualified to export rapeseed to China. Meanwhile, the Canadian government has decided to allow the extradition process of Meng Wanzhou to proceed with a hearing on March 6. Some state-owned enterprises thus violates their cargo contracts with concerns over tensions between China and Canada. Therefore, rapeseed oil on the Zhengzhou Commodity Exchange has posted biggest gain on oil sector today. However, rapeseed oil inventory has increased by 2% weekly to 560,000 tonnes in coastal areas due to slack demand for oils. Moreover, Chinese importers have purchased 98,000 tonnes of crude rapeseed oil last week for its handsome margins, and the import volume is predicted to increase. In addition, demand for rapeseed oil will be influenced by markedly-enlarged price spread between domestic rapeseed oil vs soybean oil and rapeseed oil vs palm oil. A foreign report said that China and the United States are much closer to a deal. Both sides will meet for a fresh round of talks in Beijing on March 14 and 15, and their two presidents will meet sign a deal on around March 27th. Buyers are suggested not to force up the price higher while avoiding risks from frequent fluctuations on the back of futures.
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50 yuan/tonne. Cottonseed oil picks up in small range when oils futures on DCE go up a lot today and soybean oil and palm oil spots rise 20-100 yuan/tonne due to the low operation rates and output in cottonseed oil mills and the arbitrage of buying oils and selling meals amid the spread of ASF. However, according to the news that U.S.-China leaders may sign a trade deal on March 27 when it's nearing completion, if a trade deal is reached, China's market will become negative. Moreover, the blending volume of cottonseed oil is not much. So in the short run cottonseed oil will rebound with bulk oils, yet in limited range. Buyers are suggested to replenish properly in small batches and be prudent if chasing high.
(USD $1=CNY 6.69)
