Today (Apr. 12th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price stays stable today. Specifically, non-GM Canadian soybean is not offered for out of stock and the GM old soybean is priced at 3,980 yuan/tonne, of which inventory liquidation has started; non-GM Russian soybean is unchanged at 3,300 yuan/tonne from yesterday and the GM is not offered. Brazil's CONAB Thursday slightly increased its estimate of Brazil's soybean crop in 2018/19 to 113.8 mln tonnes from 113.5 mln tonnes of March estimate. The Rosario grains exchange has raised its Argentina soy output estimate to 56 million tonnes from 54 million tonnes. With the bumper crop harvest in South America, global soybean supply is huge. Besides, the situation of U.S.-China trade talks becomes clear. Accordingly, with more U.S. soybean import, the supply is likely to go up later to the detriment of imported soybean prices in distribution market amid tepid demand. Short-term prices likely keep stable.
Cottonseed: Cottonseed prices today are stable. The low operation rates in cotton ginning mills and insufficient cottonseed supply make the mills wait for higher offers. However, the cottonseed trade is still light when cottonseed oil mills with low operation rates are cautious and purchase upon demand. In Xinjiang, some mills have finished the purchase. Short-term cottonseed is likely to fluctuate narrowly and buyers could take a hand-to-mouth buying strategy for the moment.
Oils:
Summary: U.S. soybean fell overnight on disappointing export sales data and expectations of larger South American harvests, and oil futures adjust in choppy trading on the Dalian Commodity Exchange today. In the spot market, soybean oil posts a partial loss of 10-30 yuan/tonne and palm oil fluctuates by 10-30 yuan/tonne in tepid trade. Soybean oil inventory has declined to 1.33 Mln tonnes as operation rate has run lower than expected due to soybean shortages. And rapeseed enterprises refuse to sign new contracts after some cargo cancellations as import policy seems to be tightened amid ongoing tensions between Beijing and Ottawa, resulting in only 180,000 tonnes left in April and 10,000 tonnes in May. Besides, the market is propping up oil prices on account of low soybean meal price amid the ASF. But soybean import is forecast to top 27.0 Mln tonnes in the second quarter, and palm oil imports will average at least 470,000 tonnes in April and May; hence, there is little room for oil market to rebound. Overall, short-term domestic spot oils will follow futures to post frequent fluctuations, and buyers can just maintain light stockpiles.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,370-5,500 yuan/tonne in domestic coastal areas, down by 10-30 yuan/tonne partially. (Tianjin 5,370-5,380, Rizhao 5,430, Zhangjiagang 5,500, and Guangzhou 5,370).
Palm oil: 24-degree palm oil is mainly priced at 4,460-4,520 yuan/tonne in coastal areas, fluctuating by 10-30 yuan/tonne partially. (Tianjin 4,510-4,520, up 10; Rizhao not offered; Zhangjiagang 4,450, down 30; Guangzhou 4,460, up 20; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily fluctuates today, of which it goes down by 10-20 yuan to settle at 6,890-7,100 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,000, stable). Rapeseed oil demand is subject to its enlarging price spread with soybean oil and palm oil. And soybean import from South America will surge in the Second quarter due to its good crush margins, and profitable palm oil purchase will also average at least 470,000 tonnes in April and May. Therefore, rapeseed oil market has come under pressure. But it will not slump in the short time as there are very few rapeseed cargoes later amid tensions between China and Canada. Rapeseed oil price now stands out from all oils totally due to state policy, which may also bring wild fluctuations to the market later. So buyers are suggested to maintain light stockpiles.
Cottonseed oil: Cottonseed oil today stays stable with some fluctuations of 50-100 yuan/tonne when machine halt in some mills pushes operation rates and output down. However, the cottonseed oil market is curbed as the cottonseed oil volume for blending is limited; bulk oils, in oversupply situation, is going on a weak performance; today oils on DCE move sideways and soybean oil and palm oil spots see a partial drop of 10-30 yuan/tonne. Short-term cottonseed oil is likely to fluctuate. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.72)
