Today (May. 6th), 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 old soybean is unchanged at 4,150 yuan/tonne from yesterday, and non-GM Russian soybean is unchanged at 3,400 yuan/tonne from yesterday and the GM is not offered. Argentina's soybeans are 59.3% harvested, and according to surveys, the Brazilian soybeans crop this year could be 115.46 million tonnes, up 1 million tonnes from previous estimate. The bumper crop harvest in South America and ample global supply still curbs soybean market. For U.S.-China trade talks, there are uncertainties because President Trump said that he believed talks were progressing too slowly and warned he would consider increasing tariffs on a $200 billion of Chinese goods to 25% from the current 10% on Friday, and foreign media said the Chinese side may back out of this week’s negotiations. The fluctuations of short-term imported soybean prices in distribution market are likely limited.
Cottonseed: Cottonseed prices today are stable 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. President Donald Trump twitted to vow new tariff hikes on Chinese goods due to slow progress in trade talks, and China was considering canceling this week’s trade talks in Washington D.C., Bloomberg said in its report. The market, which was expecting good news from trade talks, was enveloped with tense atmosphere. Therefore, U.S. soybean slumps on Globex today. On the Dalian Commodity Exchange, soybean meal continues to narrow down its losses after a sharp drop at the opening, and palm oil posts bigger declines upon seasonal high output and huge stockpiles in Malaysia. In spot markets, soybean oil falls 10-30 yuan/tonne and palm oil by 40-80 yuan/tonne. There are some purchases at low prices, but the trading volume is small. Domestic oil market is propped up by renewed worries in trade talks between Beijing and Washington and ongoing tensions between Beijing and Ottawa, but it is weak to rebound as a result of the arbitrage of buying meals and selling oils as oil supply remains adequate due to handsome crush margins of South American crops.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,190-5,300 yuan/tonne in domestic coastal areas, a loss of 10-30 yuan/tonne. (Tianjin 5,200, Rizhao 5,250, Zhangjiagang 5,300 and Guangdong 5,240).
Palm oil: 24-degree palm oil is mainly priced at 4,260-4,320 yuan/tonne in coastal areas, down 40-80 yuan/tonne. (Tianjin 4,320, down 40; Rizhao 4,310, down 80; Zhangjiagang 4,300, donw 50, Guangzhou , 4,260 and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily edges up today, of which it is 6,940-7,050 yuan/tonne in coastal areas, up by 30-50 yuan/tonne. (Fujian and Guangdong not offered, and Guangxi 7,050, stable). Short-term rapeseed oil prices stay at high levels as rapeseed supply may go short after its cargoes from Canada have all been canceled amid tensions between China and Canada. But the inventory has slightly increased to 410,000 tonnes in coastal areas last week, and its demand is still curbed by its enlarging spread with soybean oil and palm oil. Besides, soybean import is huge due to handsome crush margins of South American crops, and palm oil import is also large in recent two month; hence, oil supply has been under growing pressure. Later market will depend largely on a thaw between China and Canada, and before this, rapeseed oil price will still stay high. Buyers are suggested to keep light stockpiles for the moment.
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50 yuan/tonne for some prices.
Some support comes from the low operation rates and output amid poor crush margin. However, the market is under pressure when cottonseed oil volume for blending is not much; the turnover is thin; and today soybean oil spots are down 10-30 yuan/tonne. Moreover, President Trump said that he believed talks were progressing too slowly and warned he would consider increasing tariffs on Chinese goods, and foreign media said the Chinese side may back out of this week’s negotiations. Market suddenly changes its optimistic mood towards trade talks and becomes tense again. This is good for oils market and the opening price of soybean oil on DCE plummeted, declining less and less afterwards. Short-term cottonseed oil is likely to stay stable with fluctuations at a narrow range. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.79)
