Today (Apr. 8th), 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 that before the holiday, and non-GM Russian soybean is unchanged at 3,270 yuan/tonne from that before the holiday and the GM is not offered. According to USDA's U.S. Export Sales for Weekending March 28, U.S. exported 1,700,000 tonnes soybeans to China (mainland). The U.S.-China trade talks go well and as AMD said, if an agreement is reached China would purchase 40 mln tonnes soybean and 20 mln tonnes corn. Moreover, the global supply of soybean is sufficient with the bumper crop harvest of South America 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 before the agreements of U.S.-China trade talks and imported soybean prices in distribution market is predicted to be steady in the short run.
Cottonseed: Cottonseed prices today are stable with a rise of 0.02-0.03 yuan/kg. Some rising prices were due to the freight increase from Xinjiang to inner land and the cotton ginning mills' strong willingness for higher offers amid the low operation rates in mills and insufficient cottonseed supply. However, the cottonseed trade is still light when cottonseed oil mills with low operation rates are cautious about purchase. Short-term cottonseed is likely to fluctuate narrowly and buyers could make proper replenishment upon low prices.
Oils:
Summary: US soybean closed lower last Friday, but oil futures point to gains on the Dalian Commodity Exchange today. In the physicals, soybean oil posts a partial rise of 10-20 yuan/tonne and a partial loss of 20 yuan/tonne, and palm oil goes up by 20-40 yuan/tonne, attracting some purchases at low prices. Soybean oil inventory has slid further after soybean crush declined to a lower-than-expected level of 1.60 Mln tonnes for soybean shortages last week, coupled by ongoing outbreaks of the ASF, so oil mills are propping up oil prices. But they are also buying up on Brazilian soybean for its good crush margins, which may send soybean arrival to go over 27 Mln tonnes in the second quarter. Besides, trade talks go well between China and the United States and a report by ADM said that a new deal could include China buying 40 million tonnes of US soybeans and 20 million tonnes of corn, which is bearish to domestic market. Meanwhile, purchases for palm oil cargoes also remain massive. Therefore, oil market will still have little room to rebound, and buyers are suggested to avoid risks from frequent fluctuations and keep light stockpiles.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,390-5,500 yuan/tonne in domestic coastal areas, a partial rise of 10-20 yuan/tonne and a partial loss of 20-30 yuan/tonne. (Tianjin 5,400-5,410, Rizhao 5,450, Zhangjiagang 5,500, and Guangzhou 5,390-5,400).
Palm oil: 24-degree palm oil is mainly priced at 4,420-4,550 yuan/tonne in coastal areas, up by 20-40 yuan/tonne. (Tianjin 4500-4510, up 30; Rizhao 4,550, up 40; Zhangjiagang 4,470, up 40; Guangzhou 4,420, up 20; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil basically steadies today, of which it is 6,920-7,050 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,050). Rapeseed oil inventory has declined slightly to 439,000 tonnes in coastal areas last week, and rapeseed supply may get tightened in May and even disconnected in June if there is not a thaw between China and Canada; hence, short-term rapeseed oil still keeps firm. But 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. Later trend will be probably guided by relations between Beijing and Ottawa, where the price will be high before a thaw but will take plunge quickly after a thaw, so buyers can just keep light stocks.
Cottonseed oil: Cottonseed oil today stays stable with some prices rebounding 50-80 yuan/tonne when the operation rates and output in cottonseed oil mills are low, oils on DCE go up slightly, and soybean oil and palm oil spots see a partial rise of 10-40 yuan/tonne. However, the upward potentials is curbed by the limited demand for the blending volume of cottonseed oil. A glut of bulk oils weigh on the upward potential of short-term cottonseed oil and buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.72)
