Today (Apr. 1st), 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 4,030 yuan/tonne from last Friday, and non-GM Russian soybean is unchanged at 3,270 yuan/tonne from last Friday and the GM is not offered. As South America soybean is harvesting and appearing on the market with good pace, the global supply of soybean continues to grow. Add that China would buy more U-S soybean later on account of the good progress for U.S.-China trade talks 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. Market has held a wait-and-see attitude for the new round of U.S.-China trade talks this week and imported soybean prices in distribution market is predicted to be stable or stable with fluctuations in a small range in the short run.
Cottonseed: Cottonseed prices today are stable with weak fluctuation of 0.02-0.04 yuan/kg. Due to poor crush margin, falling operation rates, 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 closed lower last Friday on its largest quarterly stocks ever and the collapse in corn futures, and oil futures post narrow fluctuations on the Dalian Commodity Exchange today. In the spots market, soybean oil and palm oil fluctuate by 10-30 yuan/tonne in light trading. Whilst soybean crush has increased to 1.66 Mln tonnes this week, soybean arrival will grow sharply in the second quarter as Chinese oil mills are scooping up on Brazilian soybeans, whose crush margins have been improved amid Brazil real devaluation and soybean’s premium. Soybean oil inventory will extend its rallies as soybean crush will likely rise to 1.67 and 1.80 Mln tonnes in the coming two weeks. In the meantime, palm oil stockpiles in February have increased by 1.3% monthly to 3.05 Mln tonnes in Malaysia, and domestic purchase for 24-degree palm oil is forecase to reach 350,000-400,000 tonnes in April. Overall, short-term oil prices will maintain its weak trend under such a supply glut, but its declines will be small due to low meal prices under the ASF. Buyers are suggested to take hand-to-mouth buying.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,320-5,460 yuan/tonne in domestic coastal areas, some down by 10-20 yuan/tonne. (Tianjin 5,340-5,350, Rizhao 5,390, Zhangjiagang 5,460, and Guangzhou 5,320-5,330).
Palm oil: 24-degree palm oil is mainly priced at 4,250-4,390 yuan/tonne in coastal areas, some up by 20 yuan/tonne. (Tianjin 4,370-4,380, unchanged; Rizhao 4,390, up 20; Zhangjiagang 4,360; Guangzhou 4,250-4,290; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil stays stable with slight declines today, of which it settles down 10-20 yuan/tonne at 6,810-6,910 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,000, stable). Rapeseed oil market has taken on a frosty look as its demand is severely cut by its large spread with soybean oil and palm oil. Moreover, soybean crush continues to increase due to its growing arrivals in the second quarter. And rapeseed oil market is dragged down violently to adjust its previously bloated rises. Nevertheless, rapeseed oil inventory has declined fractionally to 442,000 tonnes in coastal areas last week, and imported rapeseed supply will get tightened in May and disconnected in June amid tensions between China and Canada. And China and Canada will probably maintain their status quo before extradition hearing against Meng Wanzhou on May 8. Rapeseed oil market has slowed down its declines today, and buyers can continue to wait in case of further drops.
Cottonseed oil: Cottonseed oil today stays stable with a decline of 50-100 yuan/tonne as the cottonseed oil volume for blending is not much and the turnover of oils market is light. However, the falling operation rates and output in cottonseed oil mills bolster the market. But short-term cottonseed oil will remain the weak trend when today oils on DCE fluctuate in narrow range, soybean oil and palm oil are stable with fluctuation of 10-30 yuan/tonne, and bulk oils are weak owing to oversupply. Buyers can stay on the sideline for the present.
(USD $1=CNY 6.71)
