Today (Apr. 18th), 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. Brazilian consultancy Celeres pegged the Brazilian soybean crop at 115.8 million tonnes, up from its previous estimate of 113.8 million. And Argentina estimated its 2018-19 soy harvest at 55.9 million tonnes. Because of large crops in South America, global supply is huge. Besides, the U.S. and China have tentatively scheduled a fresh round of face-to-face trade talks in Beijing the week of April 29 and in Washington a week later, with negotiators aiming to reach a deal in early May and hold a signing ceremony in late May. 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 0.03-0.06 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 extended its loss overnight on bumper harvests in South America, and oil futures step down in choppy trading on the Dalian Commodity Exchange today. In spot markets, soybean oil and palm oil both post a partial decline of 10-30 yuan/tonne, attracting some purchases at low prices, yet seeing totally low trading volume. Meal prices succumb to the African swine fever, potentially offering some support to oil prices. And domestic oil futures losses have been small, which is contributed to high rapeseed oil prices amid ongoing tensions between Beijing and Ottawa. But 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. In the short term, the market will extend its choppy, range-bound trend 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 5,420, Zhangjiagang 5,480, and Guangzhou 5,340).
Palm oil: 24-degree palm oil is mainly priced at 4,450-4,510 yuan/tonne in coastal areas, down by 20-30 yuan/tonne partially. (Tianjin 4,490-4,500, down 20; Rizhao 4,510, down 30; Zhangjiagang 4,450, unchanged; Guangzhou 4,450; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil inches higher steadily today, of which it goes up by 30-50 yuan to settle at 6,920-7,100 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,100, up 50). 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 the demand for rapeseed meal is soft for its large price spread with soybean oil and palm oil. Besides, soybean import will balloon 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 wait on the sidelines for the moment since there are risks in chasing after excessive rises.
Cottonseed oil: Cottonseed oil today stays stable with some declines of 80 yuan/tonne when edible oil is in periodic off-season; cottonseed oil volume for blending is not much; today oils on DCE decline with fluctuations and soybean oil and palm oil spots drop 10-30 yuan/tonne. However, the market is bolstered by the machine halt in some mills as well as the low operation rates and output accordingly. Short-term cottonseed oil is likely to stay stable with some fluctuations at a narrow range, and buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.69)
