Today (Mar. 5th), 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. South American soybean crops are flooding the market, and China may scoop up more soybeans from the United States as the two countries may strike a trade deal soon amid more and more signs for a thaw; hence, domestic soybean imports are predicted to grow. But holders still wait on the sidelines for tepid trading in distribution markets, so distribution prices for imported soybean will mostly stay stable to adjust narrowly in the near term.
Cottonseed: Cottonseed prices today are stable with a decline of 0.01 yuan/kg for some prices. The market is curbed as 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, the price decline is limited by the cotton ginning mills' mindset to hold onto goods for higher prices when the operation rates in cotton ginning mill is low and cottonseed supplies are insufficient. In the short run cottonseed is likely to fluctuate weakly and buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: US soybean extended gains in overnight trading for China and the United States might soon strike a trade deal, but oil futures reverse rises to fall on the Dalian Commodity Exchange today as traders close their position after gaining on long positions. In the spots market, soybean oil and palm oil fall in light trading. Soybean oil inventory has jumped to 1.34 Mln tonnes and palm oil to 780,000 tonnes for weak demand after the festival, so oil market pours out its gains to decline for a lack of sustained upward impetus. But demand for soybean meal also remains low since domestic hog herd has slumped under the rampant ASF, and soybean crush will thus fall to a low point for swollen soybean meal inventories for the next two weeks. Besides, rapeseed oil continues to consolidate on the Zhengzhou Commodity Exchange (ZCE) today upon tightening grants for GMO rapeseed and its by-products imports. On the whole, short-term oil market will have little room for callbacks and will maintain its strong trend. Participants can keep an eye on US-China trade talks and China-Canada relations, and buyers are suggested to be cautious in chasing up prices and keep light stocks.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,690-5,820 yuan/tonne in domestic coastal areas, down by 20-50 yuan/tonne. (Tianjin 5,750-5,760, Rizhao 5,760, Zhangjiagang 5,820, and Guangzhou 5,690-5,700).
Palm oil: 24-degree palm oil is mainly priced at 4,570-4,650 yuan/tonne in coastal areas, down by 20-30 yuan/tonne. (Tianjin 4,640-4,650, down 30; Rizhao 4,640, down 30; Zhangjiagang 4,600, down 20; Guangzhou 4,510, down 30; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed oil remain basically stable today, of which it is 6,670-6,840 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 6,690, stable). US soybean extended gains in overnight trading upon a soon-to-be-signed agreement between China and the United States, but tensions between China and Canada keep souring after Canada propelled the extradition process against Meng Wanzhou. Some Canadian rapeseed companies have been excluded from exports to China for commodity inspection issues. Rapeseed oil futures extend gains yet at a slower pace on the ZCE today upon worries for later supply amid strained relations between China and Canada. Inventories of soybean oil and rapeseed oil continue to grow upon weak demand, and demand for rapeseed oil is also influenced by markedly-enlarged price spread between domestic rapeseed oil vs soybean oil and rapeseed oil vs palm oil. Besides, Beijing and Washington are expected to reach an agreement, which will also restrict upward space of rapeseed oil. Buyers are suggested not to force up the price too high while avoiding risks from frequent fluctuations on the back of futures.
Cottonseed oil: Today some cottonseed oil prices see a rise of 100 yuan/tonne, due to the low operation rates and output in cottonseed oil mills. However, the trade deal between U.S. and China is nearing completion, and if it is done the China's market will be negative. Add profit taking and long liquidation and today oils on DCE stop rising and fall back with soybean oil and palm oil spots declining 20-50 yuan/tonne. Moreover, the blending volume of cottonseed oil is not much. So the rise of cottonseed oil is weak and in the shorter term cottonseed oil is likely to fluctuate.
(USD $1=CNY 6.70)
