Today (Mar. 6th), 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. Brazilian soybean harvest has seen rapid progress, and Chinese importers may purchase more US soybean with an expectation for a trade deal between Beijing and Washington. But soybean is traded light in domestic distribution market, and there remain uncertainties in the outcome of trade talks and when China will open its market to US soybean, so holders still tend to wait on the sidelines. Overall, 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 0.02-0.04 yuan/kg. 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 fell overnight, but soybean oil extends gains after a higher open on the Dalian Commodity Exchange today following strong rises of rapeseed oil on the Zhengzhou Commodity Exchange since China’s General Administration of Customs has confirmed that Canadian agribusiness Richardson International Ltd’s registration to ship rapeseed to China has been canceled. In the physicals, soybean oil goes up and palm oil stays stable to attract some purchases at low prices. Demand for soybean meal remains gloomy as domestic live pig amount has slumped for the rampant ASF, and soybean crush has declined to a low level in recent two weeks with more and more oil mills halting. Amid the arbitrage of buying oils and selling meals, short-term oil market will extend its upward trend. But price hikes will be limited by slack demand after the festival with soybean oil inventory increasing to 1.34 Mln tonnes and palm oil to 780,000 tonnes. Besides, if Beijing hammers out a trade deal with Washington later this month and seeks a thaw with Ottawa, oil market will experience some falling risks, so buyers are suggested not to force prices up excessively.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,730-5,850 yuan/tonne in domestic coastal areas, up by 30-50 yuan/tonne. (Tianjin 5,800-5,810, Rizhao 5,820, Zhangjiagang 5,820, and Guangzhou 5,730-5,740).
Palm oil: 24-degree palm oil is mainly priced at 4,510-4,650 yuan/tonne in coastal areas. (Tianjin 4,630-4,650, unchanged; Rizhao 4,640, unchanged; Zhangjiagang 4,600, unchanged; Guangzhou 4,510-4,530; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed oil soar today, of which it is 6890-7230 yuan/tonne in coastal areas, up by 150-210 yuan/tonne. (Fujian and Guangdong not offered； and Guangxi 6,890, up 200). US soybean fell back technically last night, and rapeseed oil futures continue to skyrocket on the Zhengzhou Commodity Exchange today pushed by fury of fresh speculative money after China’s General Administration of Customs confirmed that Canadian agribusiness Richardson International Ltd’s registration to ship rapeseed to China had been canceled. Margins in domestic rapeseed crush and rapeseed oil import are quite handsome at present, but enterprises lean toward a cautious approach in cargo purchase and tend to hoard for price hikes with concerns over later policy risks amid tensions between China and Canada. But a state-owned enterprise was said to have bought 28,000 tonnes of non-GM Russian rapeseed oil yesterday, and soybean oil and rapeseed oil inventories have continued to increase. In addition, rapeseed oil demand may be cut by enlarged price spread of soybean oil vs rapeseed oil and rapeseed oil vs palm oil. Beijing may reach an agreement with Washington later this month, and there may be a thaw between China and Canada at that time, so buyers are suggested not to force prices up higher while avoiding risks.
Cottonseed oil: Cottonseed oil today stays stable. Cottonseed oil market is supported as the operation rates and output in cottonseed oil mills are low, and amid China’s General Administration of Customs’ confirmation that China has canceled major Canadian agribusiness Richardson International registration to ship canola to China, the continuing surge of rapeseed oil on Zhengzhou Commodities Exchange push the soybean oil on DCE today to open high and go high, soybean oil spots rising 20-50 yuan/tonne. However, given the limited demand of cottonseed oil for blending, its short-term prices are likely to fluctuate strongly in narrow range.
(USD $1=CNY 6.71)
