Today (Apr. 22nd), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price rises today, among which non-GM Canadian soybean is not offered for out of stock and the GM old soybean rises by 70 yuan/tonne from last Friday to settle at 4,050 yuan/tonne, and non-GM Russian soybean rises by 70 yuan/tonne from last Friday to settle at 3,380 yuan/tonne and the GM is not offered. Prices in Tianjin port are mostly up, which is good for imported and distributed soybean. However, amid the optimistic outlook of U.S.-China trade talks, negotiators would reach a deal in early May and hold a signing ceremony in late May. More U.S. soybean will be imported to China later. Add that the global supply of soybean is sufficient due to bumper crop harvest of South America soybean and the imports for China's market is also likely to further go up to the detriment of imported soybean prices in distribution market amid tepid demand. Short-term prices likely turn stable.
Cottonseed: Cottonseed prices today are mostly stable with some fluctuations of 0.01-0.03 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, cottonseed oil mills with some machine halt and low operation rates are cautious and purchase upon demand. Short-term cottonseed is likely to move sideways and buyers could buy on a hand-to-mouth basis.
Oils:
Summary: Main oil futures break downward trend to rebound moderately on the Dalian Commodity Exchange today. In spot markets, soybean oil partially goes up by 10-20 yuan/tonne and palm oil fluctuates by 10-20 yuan/tonne. Buyers have signed contracts at low prices, but trading volume remains a little. Short-swing US soybean will probably maintain its range-bound trend, as its export demand is weighed down by bumper South American crops, whilst China and the United States are expecting a deal earlier next month amid optimism in trade talks. More and more soybean cargoes will arrive at port since domestic oil mills are buying up on profitable crop from South America for declining import costs upon big discounts. As a result, soybean oil inventories have increased by 1.92% to 1,381,600 tonnes from last week on an 8% growth to 1,820,000 tonnes in soybean crush. Meanwhile, palm oil import will at least average at 470,000 tonnes in April and May in prime for production season in Malaysia. Therefore, both oil futures and spots are weak to post bounces. And in the short term, spot price will probably maintain its choppy and range-bound trend, so buyers can keep light stockpiles for the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,3400-5,450 yuan/tonne in domestic coastal areas. (Tianjin 5,310-5,320, Rizhao 5,360, Zhangjiagang 5,450, and Guangzhou 5,340-5,350).
Palm oil: 24-degree palm oil is mainly priced at 4,410-4,500 yuan/tonne in coastal areas. (Tianjin 4,490-4,500; Rizhao 4,500, down 10; Zhangjiagang 4,450, unchanged; Guangzhou 4,410; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil edge higher steadily today, of which it settles up 30-50 yuan at 6,950-7,150 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,100, stable). Rapeseed oil inventories have fallen by 3.4% to 414,000 tonnes in coastal areas last week. Moreover, rapeseed supply may get tightened now that importers have canceled their shipments after May amid tensions between Beijing and Ottawa. Therefore, rapeseed oil prices will keep firm in the near term. However, the market has been frosty as its demand has been severely cut by its large spread with soybean oil and palm oil. And soybean crush has been increasing as oil mills are scooping up on South American crop for good crush margins. 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 with some strong fluctuations of 20-50 yuan/tonne due to machine halt in some mills and low operation rates as well as a moderate rebound for main contracts of oils on DCE today and some rises of 10-20 yuan/tonnes for soybean oil spots. However, cottonseed oil prices are weighed on when edible oil is in periodic off-season; cottonseed oil volume for blending is not much. Short-term cottonseed oil is likely to stay stable with fluctuations at a narrow range, and buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.71)
