Today is 03/29/2024

Daily Review on Markets for Oilseeds and Oils in China

2019-03-22 www.cofeed.com
      Today (Mar. 22nd), 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, and the Argentina's soybean crop harvest is expect to be bumper. Moreover, the supply of soybean in global market  remains ample and China's imports are likely to increase later to the detriment of imported soybean prices in distribution market. As to the new round of trade talks next week, Trump says tariffs on Chinese goods may stay for substantial period to ensure that Beijing complies with any trade agreement. But it's reported that China has withdrawn some earlier concessions as Chinese officials have been pressing for a full lifting of U.S. tariffs as part of any deal. With that uncertainty for U.S.-China trade talks, 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 further rebounded overnight, and oils on DCE see another decline as the drop of crude oil and the arbitrage of buying meals and selling oils. Soybean oil and palm oil spots slip by 10-50 yuan/tonne amid stagnant turnover. 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, which keep the oils futures low. Today soybean oil on DCE hit the 5,500 low below expected. However, the decline for soybean oil and palm oil will be curbed when the operation rate will decrease as soybean meal demand is still affected by ASF; there is a possibility of arbitrage of buying oils and selling meals; two vessels of rapeseed oil from Canada in East China has postponed customs clearance, which is still in the 15-day Commodity inspection period and not sure about the situation, and rapeseed oil on Zhengzhou Commodities Exchange surges due to the rumor that the rapeseed oil from Canada is not allowed to ship and may be returned. With the decline of oils, buyers can keep the wait-and-see attitude and pay attention to the U.S.-China trade talks next week.

      Soybean oil: GB Grade I soybean oil is mainly priced at 5,390-5,550 yuan/tonne in domestic coastal areas, declining by 10-50 yuan/tonne. (Tianjin 5,460-5,470, Rizhao 5,490, Zhangjiagang 5,550, and Guangzhou 5,390).

      Palm oil: 24-degree palm oil prices in coastal areas are mostly between 4,370 and 4,500 yuan/tonne, most down 10-20 yuan/tonne (Tianjin traders offer 4,490-4,500 yuan/tonne, down 10; Rizhao 4,480 yuan/tonne, down 20; Zhangjiagang traders offer 4,430 yuan/tonne, unchanged; Guangzhou 4,370 yuan/tonne, down 20; Xiamen not offered).

      Imported rapeseed oil: Imported rapeseed oil goes up today, of which it rises by 70-100 yuan/tonne to 6,940-7,030 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,050, up 50). U.S. soybeans overnight further rebounded. Two vessels of rapeseed oil from Canada in East China has postponed customs clearance and rapeseed oil on Zhengzhou Commodities Exchange surges due to the rumor that the two vessels will be returned. Besides, weekly rapeseed crush declines to 40,000 tonnes, at a low level  and rapeseed oil stock continue to fall due to the swelling inventories of rapeseed meal or insufficient raw material. For the U.S.-China summit will be held as early as the end of April or postponed to June, and if no result of the trade talks is made before the May hearing of the Meng Wanzhou extradition, the relationship between China and Canada will be very uncertain. With many factors likely affecting rapeseed oil, it will remain strong. However, stock of soybean oil and palm oil is rising, the spreads of rapeseed oil vs soybean oil and rapeseed oil vs palm oil are expanding, and rapeseed oil demand is slack. The rise now are owing to the tension between China and Canada. So due to the political risk of chasing high, buyers are suggested to take a hand-to-mouth buying strategy.

      Cottonseed oil: Cottonseed oil today stays stable as the low operation rates and output in cottonseed oil mills. However, the market is curbed as the cottonseed oil volume for blending is not much; the turnover for oils is thin; U.S. soybeans overnight further rebound; due to the crude oil decline and arbitrage of buying meals and selling oils, oils on DCE today see another decline and soybean oil and palm oil spots drop 10-50 yuan/tonne. Short-term prices will keep the weak trend and buyers are suggested to take a hand-to-mouth buying strategy.

       (USD $1=CNY 6.70)