Today (Mar. 21st), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price stays stable today, among which non-GM Canadian soybean is not offered for out of stock and the GM old soybean is unchanged at 4,020 yuan/tonne from yesterday, and non-GM Russian soybean is unchanged at 3,270 yuan/tonne from yesterday and the GM is not offered. Brazilian soybeans harvest is 63% complete, compared to 56% for the 5-year average, while the Argentina's soybean harvest has begun. Add that U.S. Secretary of Agriculture said China's agricultural products purchase from U.S. could increase three times and China's imports are likely to increase later to the detriment of imported soybean prices in distribution market. As to the trade war, according to Reuters, Trump says tariffs on Chinese goods may stay for substantial period to ensure that Beijing complies with any trade agreement, which could complicate U.S.-China trade talks set to resume next week as Chinese officials have been pressing for a full lifting of U.S. tariffs as part of any deal. The market then hold a wait-and-see attitude and the short-term prices of imported soybean for distribution are predicted to fluctuate in a limited range.
Cottonseed: Cottonseed prices today are stable. The cottonseed market is supported by 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 thin and cautious for cottonseed crush suffers losses and the stocks in some cottonseed oil mills are still enough. Add that the meal demand is poor with the spread of African swine fever and short-term cottonseed is likely to move sideways and buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: US soybean reversed its loss to rebound overnight, and oil futures point to gains on the Dalian Commodity Exchange today. In the physicals, soybean oil and palm oil keep firm with some ups and downs by 10-20 yuan/tonne to attract some purchases at low prices. US soybean continues to be range-bound. Oil market now rebounds slightly on the arbitrage of buying oils and selling meals amid impacts on soybean meal from the ASF. And soybean arrivals will climb to 8.50 Mln tonnes as South American crops hit the market, in addition to ongoing purchase of imported oils. But soybean oil inventory has piled up to 1.38 Mln tonnes due to sluggish demand. Therefore, oil market has been under pressure due to its bearish fundamentals, and is predicted to adjust with slight ups and downs in the short run. Participants can closely watch trade talks next week. The United States hopes to leave some tariffs on Chinese goods to ensure that Beijing complies with any trade agreement, which may be a hindrance for the talks, so there may be no conclusion by the end of April.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,450-5,590 yuan/tonne in domestic coastal areas, fluctuating by 10-20 yuan/tonne. (Tianjin 5,500-5,510, Rizhao 5,520, Zhangjiagang 5,590, and Guangzhou 5,450).
Palm oil: 24-degree palm oil is mainly priced at 4,390-4,510 yuan/tonne in coastal areas, up by 10-20 yuan/tonne. (Tianjin 4,500-4,510, up 10; Rizhao 4,500, up 20; Zhangjiagang 4,430, unchanged; Guangzhou 4,390; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily edges up today, of which it goes up by 20-30 yuan/tonne to 6,840-6,930 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,000, stable). Whilst domestic oil supply is abundant, rapeseed meal demand has been severely crippled by its widened spread with soybean oil and palm oil. Besides, there may be a thaw between Beijing and Ottawa since Beijing and Washington are very likely to strike a trade deal. In addition, China’s Ministry of Rural and Agriculture Affairs will grant a part of GMO certificates next week, and the market is awaiting commodity inspection results of rapeseed oil cargoes at Eastern ports. Overall, short-term rapeseed oil will have little downward space amid so many uncertainties, and may fluctuate time and again on the back of its futures, so buyers can just wait for the moment.
Cottonseed oil: Cottonseed oil today stays stable. U.S. soybeans overnight rebounded after earlier decline, today oils on DCE rise slightly and soybean oil and palm oil spots stay stable with fluctuations in the range of 10-20 yuan/tonne. Add that the low operation rates and output in cottonseed oil mills and all these are supportive of prices. However, the limited cottonseed oil volume for blending and the thin oils turnover still curb the cottonseed oil market. Short-term prices are likely to stay the weak trend and buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.68)
