Today (Mar. 8th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price keeps steady with declines 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 priced lower by 10 yuan at 3,190 yuan/tonne and the GM not offered. Chinese importers may scoop up more US soybeans since China and the US are expected to strike a trade deal during the presidents’ meeting later this month. Moreover, Chinese state-owned firms were reported to buy at least 500,000 tonnes of U.S. soybeans on Thursday. And South American farmers are now harvesting their bumper crops. Therefore, domestic soybean supply will likely multiply later. But soybean is traded light in domestic distribution market. Overall, distribution prices for imported soybean will mostly stay stable to adjust narrowly in the near term.
Cottonseed meal: Today some cottonseed prices see a decline of 0.02 kg/tonne. 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 edged up in overnight trading, and oil futures extend their losses to hover around the previous close on the Dalian Commodity Exchange (DCE). In the physicals, soybean oil slips by 20-60 yuan/tonne, and palm oil fluctuates by 10-30 yuan/tonne following strong fluctuations of its futures. The trading volume is little as buyers take a cautious approach in purchasing. Soybean meal demand is cut down by the ASF so that more and more oil mills have to halt for swelling inventories. And China’s Customs said it would step up inspections of Canadian canola. Oil price is thus shored up to see limited declines. But soybean oil and palm oil inventories have both grown upon sluggish demand after the festival. And ending stocks of Malaysia palm oil in February is forecast to reach 2.95-2.98 Mln tonnes by three major agencies, just below 3.0 Mln tonnes in January. In addition, palm oil in main areas will enter into a cycle of increasing production. And some spread traders have begun to close their positions on account of meal futures rebounds on the DCE amid better trading volume of soybean meal. Oil market is thus weighed down. On the whole, oil spots market will continue frequent fluctuations on the back of futures, and buyers are suggested to keep light stocks for the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,620-5,750 yuan/tonne in domestic coastal areas, down by 20-60 yuan/tonne. (Tianjin 5,700-5,710, Rizhao 5,720, Zhangjiagang 5,750, and Guangzhou 5,620-5,630).
Palm oil: 24-degree palm oil is mainly priced at 4500-4600 yuan/tonne in coastal areas, fluctuating by 10-30 yuan/tonne. (Tianjin 4,590-4,600, up 10; Rizhao 4,580, down 20 Zhangjiagang 4,540-4,550, unchanged; Guangzhou 4,500, up 30; and Xiamen not offered).
Imported rapeseed oil: Prices for imported rapeseed oil stay stable with slight rises, of which it is 6,950-7,080 yuan/tonne in coastal areas, up by 20 yuan/tonnes. (Fujian and Guangdong not offered, and Guangxi 7,050, stable). Rapeseed crush margins have hit 700 yuan/tonne on the electronic board, and rapeseed oil import profits have also reached a high level of over 500 yuan/tonne, which can be partially attributed to the cancellation of Richardson's canola export registration by China’s Customs. Moreover, domestic enterprises are cautious in cargo purchase with worries over state policies after the Customs requested to step up inspections of Canadian rapeseed imports, and several state-owned firms have already broken their rapeseed contracts for May shipments. Rapeseed oil futures thus go upward in spite of lower opens on the Zhengzhou Commodity Exchange today since more and more traders and oil mills choose to stop their quotations to build up inventories. But rapeseed oil stockpiles will continue to grow due to high operation rate in coastal oil mills. Besides, palm oil will also enter into a cycle of output growth in March. And the price difference for soybean oil vs rapeseed oil and rapeseed oil vs palm oil has also been enlarged markedly, which will severely cut demand for rapeseed oil. Canadian government has postponed the extradition hearing against Meng Wanzhou to May, before which relationship between Beijing and Ottawa may get eased. If so, rapeseed oil market will sharply fall back, so buyers are suggested to strengthen prevention of risks at high prices.
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50 yuan/tonne. The market is bolstered by the low operation rates in cottonseed oil mills and small output of cottonseed oil. However, cottonseed oil market is negative when the cottonseed oil volume for blending is not much, and due to some arbitrage of buying oils and selling meals oils, market remains under pressure with the spots of soybean oil falling 20-60 yuan/tonne. With the good and bad news the short-term cottonseed oil is likely to mainly fluctuate at a narrow range and buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.72)
