Today (Apr. 2nd), 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 yesterday, and non-GM Russian soybean is unchanged at 3,270 yuan/tonne from yesterday and the GM is not offered. According to USDA, U.S. private exporters have sold 828,000 tonnes soybean to China, which is the second soybean order by China after the end of new round U.S.- China trade talks last week. With the good progress for trade talks, more U.S. soybeans are likely to be purchased later. Add that South America soybean is harvesting and the global supply of soybean is sufficient 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 mostly stable with some prices down 0.01-0.1 yuan/kg. Due to poor crush margin, low operation rates, cottonseed oil mills are more cautious in purchasing cottonseed amid the thin turnover, especially the tepid demand of cottonseed oil and meal. However, the short-term cottonseed is likely to become stable when today soybean meal rebound a lot and the cotton ginning mills incline to higher offers owing to the low operation rates in cotton ginning mills and cottonseed shortage. Buyers are suggested to take a hand-to-mouth buying strategy.
Oils:
Summary: US soybean surged overnight on upbeat sentiment for a trade deal with China, and oil futures point to gains in choppy trading on the Dalian Commodity Exchange today. In the spots market, soybean oil and palm oil rise by 10-40 yuan/tonne to trade better at low prices, in spite of low volume on the whole. Oil mill have geared up their shipment a bit recently, reducing soybean oil inventory to 1.34 Mln tonnes, and they are also propping up oil prices in view of low meal prices under the ASF. Therefore, oil market is bracing for rebounds today. But Chinese importers are buying on Brazilian soybean for its good crush margins with 15 cargoes last week, sending soybean arrival to exceed 27.0 Mln tonnes from April to June (with 8.25 Mln tonnes in 129 cargoes in April), so soybean crush will continue to rise in the next two weeks. In the meantime, importers are also buying a substantial amount of profitable palm oil. Facing a supply glut, oil market has little space for rebounds. Buyers are suggested to make tentative purchase on the dips, instead of chase after excessive gains.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,340-5,460 yuan/tonne in domestic coastal areas, some up by 10-30 yuan/tonne. (Tianjin 5,350-5,360, Rizhao 5,410, Zhangjiagang 5,460, and Guangzhou 5,340-5,350).
Palm oil: 24-degree palm oil is mainly priced at 4,330-4,410 yuan/tonne in coastal areas, some up by 10-40 yuan/tonne. (Tianjin 4,400-4,410, up 30; Rizhao 4,420, up 30; Zhangjiagang 4,380, up 10; Guangzhou 4,290-4,330, up 40; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil stays stable in fluctuation, of which it settles ups and downs by 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 market takes on a gloomy outlook due to its continuously expanding spread with soybean oil and palm oil. Moreover, soybean arrival is growing in the second quarter, and palm oil purchase is also boosted by import margins. Therefore, rapeseed oil market has reacted bearishly on such a supply glut. But later rapeseed supply will probably get tightened since there is no cargo after May amid tensions between Beijing and Ottawa and rapeseed of February shipment is still not allow to go processed. And nothing is sure about tensions between China and Canada before the extradition hearing against Meng Wanzhou on May 8. So there is little space for large losses for rapeseed oil in the near term, and later trend will be guided by state policies, which have given strong support to current high prices and may bring wild fluctuations to later market. Buyers are suggested to keep light stockpiles.
Cottonseed oil: Cottonseed oil today is mostly stable with some declines of 40 yuan/tonne as the cottonseed oil volume for blending is not much and the turnover of oils market is light. However, the cottonseed oil has support when the operation rates in cottonseed oil mills as well as the output are decreasing, and oils on DCE rise slightly with fluctuations, and soybean oil and palm oil spots go up 10-40 yuan/tonne. But short-term cottonseed oil will remain the weak trend for bulk oils remain the weak trend due to oversupply. Buyers can stay on the sideline for the present.
(USD $1=CNY 6.72)
