Today (Apr. 17th), 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 3,980 yuan/tonne from yesterday, and non-GM Russian soybean is unchanged at 3,300 yuan/tonne from yesterday and the GM is not offered. IGC raised slightly its forecast for global soybean production in 2018/19 to 359 mln tonnes this month, up by 5% from 341 mln tonnes last year. The global soybean supply is large amid the ongoing marketing of South America soybean. And more U.S. soybean would be imported by China amid the optimistic situation of U.S.-China trade talks. The increasing imported soybean supply and its tepid demand would weigh on the prices of imported soybeans for distribution. Short-term prices likely keep stable.
Cottonseed: Cottonseed prices today are mostly stable with some prices up 0.02-0.06 yuan/kg. The low operation rates in cotton ginning mills and insufficient cottonseed supply, especially for some regions, as well as the strong sideways for unginned cotton prices make the cotton ginning 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. Short-term cottonseed is likely to stay stable with strong fluctuations and buyers could make proper replenishment upon low prices.
Oils:
Summary: US soybean continued its loss overnight for no fresh news from US-China trade talks and large sales of South American crops. Oil futures are in choppy, range-bound trading on the Dalian Commodity Exchange today. In the spot market, soybean oil is stable and palm oil broadly up 20 yuan/tonne, attracting some purchases at low prices, yet seeing totally low trading volume. South American soybean is trading at big discount, sending its cost of arrival to fall and its net crush margins to reach 270-320 yuan/tonne for shipments in May to July. As a result, oil mills in China have multiplied their soybean crush to near 1.80 Mln tonnes amid surging imports. And soybean oil inventory may keep increasing as peak demand is yet to be observed. Meanwhile, palm oil has also entered into production growth in Malaysia. Therefore, oil market is weighed on by supply gluts. But the ASF has been a drag on meal prices, and rapeseed oil price stays high as there is still no sign of a thaw between Beijing and Ottawa, so oil market will not slump at present. In the short term, the market will extend frequent fluctuations to adjust on the back of futures, and buyers can maintain light stockpiles for the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,340-5,480 yuan/tonne in domestic coastal areas. (Tianjin 5,340-5,350, Rizhao 5,400, Zhangjiagang 5,480, and Guangzhou 5,340-5,350).
Palm oil: 24-degree palm oil is mainly priced at 4,440-4,540 yuan/tonne in coastal areas, up by 20 yuan/tonne. (Tianjin 4500-4510, up 20; Rizhao 4,540; Zhangjiagang 4,450, up 20; Guangzhou 4,440, up 20; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil inches higher steadily today, of which it goes up by 20-30 yuan to settle at 6,910-7,050 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,050). Rapeseed oil price will hold firm amid tensions between China and Canada, as rapeseed supply may get tightened since its cargoes after May have all been canceled. But its demand has been severely cut by its fresh huge price spread with soybean oil and palm oil. Moreover, soybean import will surge in the second quarter due to handsome crush margins of South American crops, and palm oil has also entered into production growth in Malaysia. Therefore, the market has been in a bearish stance. Overall, rapeseed oil will maintain its high prices in the near term, but may take plunge upon a thaw between China and Canada. Buyers can maintain light stockpiles at present.
Cottonseed oil: Cottonseed oil today stays stable when the machine halt in some mills pushes operation rate and output lower, and today oils on DCE fluctuate in narrow range and soybean oil spots are stable. However, the periodic off-season of edible oil and the limited cottonseed oil volume for blending weigh on cottonseed oil market. But the market is expected to rise slowly with fluctuations later due to the spread of ASF. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.71)
