Today (Apr. 26th), 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 4,050 yuan/tonne from yesterday, and non-GM Russian soybean is unchanged at 3,380 yuan/tonne from yesterday and the GM is not offered. Argentina's Agriculture Minister estimated that Argentina's soybean crop in 2018/19 will reach 55.9 million tonnes, up 48% from last year. And according to Safras, through the week of April 12th, the Brazilian soybeans harvest is 89.1% complete of the estimated planted area. With the bumper crop harvest and quick marketing in South America, the global soybean supply is huge. Additionally, with clear outlook of U.S.-China trade talks, China will purchase more US soybeans. The expectation of more soybean import weighs on the imported soybeans for distribution amid its tepid demand. The fluctuation of short-term prices are likely curbed.
Cottonseed: Cottonseed prices today are stable when the cotton ginning mills are waiting for higher offers as the insufficient and tight supply for cottonseed. However, the oil mills' cautiousness about purchase limits the uptrend as a tense situation during the inspection for environmental protection and poor crush margin result in low operation rates. Given the uncertainty in the market, short-term cottonseed is likely to move sideways and buyers could buy on a hand-to-mouth basis.
Oils:
Summary: U.S. soybean bounced on bargain hunting in overnight trade, but it is still restricted and checked by bumper South American crops that have stolen its market share. Domestically, oil futures post large losses on the Dalian Commodity Exchange (DCE) today. In spot markets, soybean oil and palm oil broadly fall 20-70 yuan/tonne in weak trading. Traders said, two cargoes of Canadian rapeseed oil at Taizhou and Zhangjiagang ports are allowed to go processed now, and followup cargoes can be unload immediately after passing sampling inspections. Rapeseed oil posts sharp losses for several consecutive sessions on the Zhengzhou Commodity Exchange due to loosening state policy, thus dragging down soybean oil and palm oil. Moreover, oil mills are scooping up on South American soybean for its good crush margins and selling oils and meals as a hedge on the DCE. Nevertheless, soybean meal that has been reporting strong trading volume since March for its higher price performance than alternative meals, so that oil mills have gradually raised their utilization rate to satisfy better-than-forecast demand; hence, soybean oil inventory has been piling up. And palm oil has entered into production season in Malaysia. Therefore, oil mills are unable to prop up prices amid bearish fundamentals. Oil market is now trapped in growing supply pressure. Besides, China and the United States have scheduled their talks in Beijing and Washington D.C. in the next two weeks with a high expectation for a deal. In the short term, oil futures will probably post weak adjustments, and buyers can just wait on the sidelines.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,200-5,330 yuan/tonne in domestic coastal areas, down by 30-60 yuan/tonne. (Tianjin 5,200-5,210, Rizhao 5,280, Zhangjiagang 5,330, and Guangzhou 5,240-5,250).
Palm oil: 24-degree palm oil is mainly priced at 4,370-4,400 yuan/tonne in coastal areas, down 20-50 yuan/tonne. (Tianjin 4,390-4,400, down 40; Rizhao 4,380, down 50; Zhangjiagang 4,380, down 20; Guangzhou 4,370, down 20; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil stays stable with some declines today, of which it settles down 20-50 yuan/tonne at 6,850-7,050 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,050, down 50). High-priced rapeseed meal market takes on a waning look as its demand has been cut by its large spread against palm oil and soybean oil. Moreover, soybean import from South America is ballooning due to its good crush margins of 230-300 yuan/tonne. Rapeseed oil market is dragged down when oil mills are active in purchase of soybean from South America and located profit by short-selling of oils and meals; oils future mostly decline as margin for imports increases the purchase of palm oil cargo; the rumor that the limitation of rapeseed oil from Canada will ease triggers a closing of long positions. However, as rapeseed cargoes after May have all been canceled amid tensions between Beijing and Ottawa, a big decline unlikely happens until a thaw between China and Canada. The current high prices are all due to the government policy, and so will be the prices later. Once the tense relationship between China and Canada eases, rapeseed oil will take plunge. Buyers can just wait on the sidelines.
Cottonseed oil: Cottonseed oil today stays stable due to low operation rates and output amid poor crush margin and the inspection for environmental protection. However, the upwards potential of cottonseed oil is curbed when cottonseed oil volume for blending is not much; today oils on DCE fall back greatly, and soybean oil and palm oil spots drop 20-70 yuan/tonne. 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 6.73)
