Today (May. 5th), 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 old soybean is unchanged at 4,150 yuan/tonne from that before the holiday, and non-GM Russian soybean is unchanged at 3,400 yuan/tonne from that before the holiday. The insufficient quantity of imported and distributed soybean for food supports the prices. However, FC Stone raises the Brazilian soybean yield estimate in 2018/19 by 800,000 tonnes to 116.5 million tonnes and Safras & Mercado raises the estimate by 1.5 million tonnes to 117.9 million tonnes as well. With the bumper crop harvest in South America, the global soybean supply is ample. Additionally, with optimistic 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. A fresh round of trade talks will be held in Washington next week. The fluctuations of short-term prices for imported soybean in distribution market are likely to be limited before an agreement between U.S. and China.
Cottonseed: Cottonseed prices today go up 0.04-0.08 yuan/kg due to the tight supply when the cottonseed quantity is decreasing and some cottonseeds are sold to livestock farms. However, the upward potential is likely curbed by low purchase activity of oil mills due to the high price of cottonseed and poor crush margin, some mills mainly using its own stock. Short-term cottonseed is likely to go strong. Buyers can make proper replenishment upon low prices, yet don't chase high bids too far.
Oils:
Summary: U.S. soybean saw a total loss of 22 cents over the May Day holiday on weak exports and big supplies from South America, and oil futures are not available from Dalian Commodity Exchange for Sunday today. In spot markets, soybean oil and palm oil are mostly not offered and some down by 20-40 in tepid trade. Soybean supply will be out of questions as Chinese importers have bought up on South American soybeans for handsome crush margins, so soybean crush will see a rise. Palm oil cargoes are also substantial in recent two months. Therefore, oil market is weighed down by growing supplies. Short-term oil market will likely remain its weak trend to fluctuate. Chinese delegates will fly to Washington D.C for trade talks on May 8, during which both sides are expected to reach a deal, so participants can keep a close watch.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,190-5,300 yuan/tonne in domestic coastal areas, a partial loss of 20-40 yuan/tonne. (Tianjin 5,190-5,200, Rizhao 5,260, Zhangjiagang not offered and Guangdong 5,250-5,260).
Palm oil: 24-degree palm oil is mainly priced at 4,350-4,390 yuan/tonne in coastal areas, down 20 yuan/tonne partially. (Tianjin 4,360-4,370, down 20; Rizhao 4,390-4,400, unchanged; Zhangjiagang not offered, Guangzhou , 4,350 and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily edges down today, of which it is 6,860-7,050 yuan/tonne in coastal areas, some down by 20 yuan/tonne. (Fujian and Guangdong not offered, and Guangxi 7,050, stable). Rapeseed oil market has seen few buyers as its demand is severely cut by its enlarging spread with soybean oil and palm oil. Moreover, soybean import will probably hit a total of 25 mln tonnes from May to July due to good crush margins of South American crops, and palm oil cargoes are also arriving from from time to time recently. Rapeseed oil market has thus turned negative. But Canadian rapeseed cargoes have all been canceled after May amid its diplomatic disputes with China, so rapeseed supply may get tightened. Short-term rapeseed oil prices will stay at high levels, but may take plunge upon a thaw between the two countries. Buyers can just stay on the sidelines.
Cottonseed oil: Cottonseed oil today stays stable with a decline of 50 yuan/tonne when the cottonseed oil volume for blending is not much; the turnover is thin; most of soybean oil and palm oil spots are not offered and the prices offered decline 20-40 yuan/tonne amid the absence of futures price today. However, the low output and operation rates in oil mills, which is due to poor crush margin, support the cottonseed oil market. With the slack bulk oils commodity, short-term cottonseed oil is likely to stay stable with some fluctuations at a narrow range. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.74)
