Today (May. 8th), 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. ABIOVE (Brazilian Vegetable Oil Industry Association) raised the forecast of 2018/19 Brazilian soybeans crop up 700,000 tonnes to 117.6 million tonnes. The bumper crop harvest in South America and ample global supply still still curbs soybean market. Besides, for U.S.-China trade talks, there are still some uncertainties although the trade talks will continue and the Chinese trade delegation will still be invited to the new round trade talks in U.S. on May 9 and 10. The fluctuations of imported soybean prices in distribution market in the short run 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. soybean rebounded technically in overnight trade, and oil futures continue to rise yet at a slower pace on the Dalian Commodity Exchange today. In spot markets, soybean oil and palm oil broadly go up by 10-30 yuan/tonne in tepid trading. Chinese oil mills bought another three cargoes of Brazilian soybeans for good crush margins, of which two cargoes were traded at +138N and +146N (CNF) for June shipment and the other was +150N (CNF) for July shipment. Due to such an adequate supply outlook, oil mills will pick up their utilization rate, so soybean oil inventory is expected to go above 1.40 mln tonnes. In addition, palm oil is seeing seasonal out growth and high stockpiles in Malaysia. Subject to those bearish fundamentals, oil market will have little room to rebound and may stay at a choppy range due to changes in trade talks. Buyers are suggested not to chase after hikes but to focus on talks in Washington on Thursday and Friday that may bring a thaw to trade disputes.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,250-5,350 yuan/tonne in domestic coastal areas, a rise of 10-30 yuan/tonne. (Tianjin 5,250-5,260, Rizhao 5,300, Zhangjiagang 5,350 and Guangdong 5,300).
Palm oil: 24-degree palm oil is mainly priced at 4,290-4,360 yuan/tonne in coastal areas, broadly up 10-30 yuan/tonne. (Tianjin 4,330-4,340, up 10; Rizhao 4,360, up 30; Zhangjiagang 4,320, unchanged, Guangzhou , 4,290, up 10, and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily goes up today, of which it is 6,980-7,200 yuan/tonne in coastal areas, up by 10-20 yuan/tonne partially. (Fujian and Guangdong not offered, and Guangxi 7,200, stable). Short-term rapeseed oil prices will remain high due to a tight supply prospect of rapeseed after July and August as later rapeseed cargoes from Canada have all been canceled, in addition to a swift change in China- U.S. trade talks and ongoing tensions between Beijing and Ottawa. But there are bearish factors including huge stockpiles of soybean oil and palm oil, which have severely cut the demand for rapeseed oil by their lower prices. Due to the upcoming extradition hearing against Meng Wanzhou and renewed uncertainties in US-China trade talks, rapeseed oil market will go much more volatile recently, and buyers must remain cautious in buying in case of policy risks.
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50 yuan/tonne for some prices when the poor crush margin results in low operation rates and output; US soybeans saw a technical rebound, and today oils on DCE further go up with soybean oil and palm oil spots mostly up 10-30 yuan/tonne. However, the limited cottonseed oil volume for blending and thin turnover curbs cottonseed oil upward potential. Short-term cottonseed oil is likely to stay stable with some fluctuation at a narrow range. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.77)
