Today (Mar. 11th), 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 3,190 yuan/tonne and the GM not offered. News said that China had scooped up on about 2.0 Mln tonnes of US soybean, the first purchase after its pledge last month to buy additional 10 Mln tonnes。And South American soybeans are also being harvested. Therefore, domestic soybean supply will probably get increased 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: Cottonseed prices today rebound after earlier decline. The prices go up 0.02 yuan/kg as the cotton ginning mills' mindset to hold onto goods for higher prices amid low operation rates in cotton ginning mills and cottonseed shortage. However, the cottonseed trade is weak and still cautious for cottonseed crush is still under losses and the stocks for some cottonseed oil mills are still enough. So short-term cottonseed is likely to fluctuate and buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: US soybean dropped below 900 cents last Friday on bearish USDA’s report for March, and oil futures go see-sawed narrowly on the Dalian Commodity Exchange today. In the physicals, soybean oil and palm oil both steadily fluctuate by 10-20 yuan/tonne in light trading. Demand for oils turns slack after the festival, while palm oil has entered into a cycle of output growth in state of origin in March. And some traders closed out their positions upon profit taking in buying oils and selling meals after soybean meal traded well and braced for rebounds. Therefore, there is limited room for oils to rebound. But operation rate for soybean crush remains low for insufficient raw material and swollen inventories of soybean meal, and rapeseed oil continues to skyrocket on the Zhengzhou Commodity Exchange after China’s Customs declared to step up inspections on Canadian rapeseed cargoes. The falling space for soybean oil and palm oil is also restricted from this respect. Overall, short-term oil spots will likely follow futures to post frequent fluctuations, and buyers can keep light stocks for the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,620-5,760 yuan/tonne in domestic coastal areas, fluctuating by 10-20 yuan/tonne. (Tianjin 5,700-5,710, Rizhao 5,700, Zhangjiagang 5,760, and Guangzhou 5,620).
Palm oil: 24-degree palm oil is mainly priced at 4,490-4,610 yuan/tonne in coastal areas, up by 10-20 yuan/tonne partially. (Tianjin 4,600-4,610, up 20; Rizhao 4,600, up 20 Zhangjiagang 4,560, up 10; Guangzhou 4,490-4,510; and Xiamen not offered).
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50-100 yuan/tonne owing to the low operation rates and output in cottonseed oil mills and a surge of rapeseed oil futures amid the tense relationship between China and Canada. However, the upward potential is limited when US soybeans fell below 900 cents last Friday among the pessimism from USDA report for March, and today oils on DCE fluctuate in narrow range, and the cottonseed oil volume for blending is not much. Short-term cottonseed oil is likely to fluctuate a lot and buyers are suggested to take a hand-to-mouth buying strategy.
Imported rapeseed oil: Prices for imported rapeseed oil surges today, of which it is 7,070-7,200 yuan/tonne in coastal areas, up by 100-120 yuan/tonnes. (Fujian and Guangdong not offered, and Guangxi 7,070). US soybeans fell last Friday due to the stock in USDA report higher than estimate. However, market becomes more and more worry about the rapeseed supply because the relations between China and Canada are strained, and there was a shipment default separately for a big state-owned enterprise and a foreign enterprise last week; thus, rapeseed futures on the Zhengzhou Commodity Exchange today led the gain. Today more and more oil mills are inclined to hoard their existing stocks and most mills stop offering. Stocks in coastal areas last week fell to 514,000 tonnes, down 9%. With the sufficient stock of rapeseed meal and inadequate supply of rapeseed, in the following two weeks the weekly rapeseed crush will fall to a low level about 50,000 tonnes. Short-term rapeseed oil will stay firm. However, the rapeseed oil will be greatly influenced when the the rapeseed and rapeseed oil import from Canada are profitable and now rapeseed oil import from EU is profitable as well; it's said that two state-own companies have purchased about 80,000 tonnes Non-GM rapeseed oil from EU last week; the price gap between soybean oil and rapeseed oil and that between rapeseed oil and palm oil are both greatly expanded. 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.
(USD $1=CNY 6.72)
