Today (Mar. 27th), 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. As South America soybean with bumper crop harvest is appearing on the market, the global supply of soybean continues to grow and the supply for China's market is also likely to go up later to the detriment of imported soybean prices in distribution market amid tepid demand. Due to the new round of U.S.-China trade talks market has held a wait-and-see attitude and imported soybean prices in distribution market is predicted to fluctuate in a limited range for the short run.
Cottonseed: Cottonseed prices today are stable with a decline of 0.01 yuan/kg for some prices. Due to poor crush margin and relatively sufficient stock, cottonseed oil mills are more cautious in purchasing cottonseed amid the tepid demand of cottonseed oil and meal. However, the cottonseed decline is limited by the cotton ginning mills' mindset to hold onto goods for the low operation rates in cotton ginning mills and cottonseed shortage. Short-term cottonseed is likely to fluctuate weakly and buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: US soybean fell overnight on pressure from harvests underway in South America, and oil futures fluctuate to adjust on the Dalian Commodity Exchange today. In the physicals, soybean oil and palm oil steadily fluctuate by 10-30 yuan/tonne, and trading volume remains tepid as buyers are waiting on the sidelines. Soybean oil inventory still stays at a high level of 1.36 Mln tonnes in current slack season in spite of a small drop. And Chinese oil mills booked a higher-than-forecast Brazilian soybean at 19 cargoes in total last week, which will amplify later arrival to a total of 27 Mln tonnes from April to June. Given this, oil mills will send crush volume up to 1.70 Mln tonnes in the next two weeks. Meanwhile, palm oil purchase has also reached 23 cargoes in April. Overall, short-term oil market will maintain weak fluctuations, and buyers can take hand-to-mouth buying.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,390-5,510 yuan/tonne in domestic coastal areas, fluctuating by 10-20 yuan/tonne. (Tianjin 5,420-5,430, Rizhao 5,440, Zhangjiagang 5,510, and Guangzhou 5,390).
Palm oil: 24-degree palm oil is mainly priced at 4,320-4,470 yuan/tonne in coastal areas, down by 10-30 yuan/tonne. (Tianjin 4,460-4,470, unchanged; Rizhao 4,470, unchanged; Zhangjiagang 4,390; Guangzhou 4,320; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil rises today, of which it settles up 70-90 yuan/tonne at 7,040-7,140 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,050, stable). US soybean fell last night, but rapeseed oil futures continue to soar on the Zhengzhou Commodity Exchange today as rapeseed supply will get tightened later if tensions cannot be resolved between China and Canada, especially after China’s General Administration of Customs confirmed yesterday that another Canadian firm for canola export registration had been canceled. Currently, only two cargoes of rapeseed is reported to arrive in April and none after May. Two cargoes of crude rapeseed oil at East Port were approved to be unloaded yesterday but not to be processed or sold. There will be probably no signs for a thaw between these two countries before the extradition hearing against Meng Wanzhou on May 8. Therefore, rapeseed oil is expected to stay firm in the short run. But rapeseed oil market has been quiet recently due to its enlarged spread to 1,700 yuan/tonne with soybean oil, and later market will hinge on relations between Beijing and Ottawa and will quickly take plunge once there is a thaw, so policy risk will probably grow bigger along with higher prices.
Cottonseed oil: Cottonseed oil today stays stable with some declines of 50 yuan/tonne when the cottonseed oil volume for blending is not much; the turnover in oils market is thin. However, the price decline is curbed currently by the low operation rates and output in cottonseed oil mills. But the weak trend of short-term cottonseed oil is likely to remain the same when oils on DCE today move sideways; soybean oil and palm oil spots are stable with fluctuations of 10-30 yuan/tonnes; bulk oils is slack. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.72)
