Today (May. 9th), 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. The agencies has raised 2018/19 soybean crop. The bumper crop harvest in South America and ample global supply still curbs soybean market. For trade talks, U.S. plans to increase tariffs on a $200 billion of Chinese goods to 25% from the current 10% on May 10, while China’s Commerce Ministry said if the U.S. tariff measures were implemented, China would have to take necessary countermeasures. With the upcoming new round of trade talks and the increasing concerns about the renewed US-China trade tensions, the fluctuations of short-term imported soybean prices in distribution market are likely limited.
Cottonseed: Cottonseed prices today are stable with a rise of 0.02-0.06 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: The United States announced that tariffs on Chinese goods would increase on Friday, and China’s Commerce Ministry said last night that China would have to take necessary countermeasures. U.S. soybean ended with losses overnight upon another escalation of trade war, which is conversely bullish to domestic market. However, soybean oil just posts corrections in choppy trade and palm oil even edges lower on the Dalian Commodity Exchange today, as traders hold that soybean meal has received more support from this escalation so that they begin to take the arbitrage of buying meals and selling oils. In the physicals, soybean oil shows a partial rise of 10-20 yuan/tonne, while palm oil partially goes down by 20 yuan/tonne, both attracting some purchases at low prices. Meng Wanzhou is set to appear on the hearing today, where not a decision on whether she will be extradited is made, and her next appearance will be on around September 23rd. This is a sign that China and Canada will be in a stalemate before September if there is not a thaw between Beijing and Washington. And before this, oil market will be buoyed by blocked import of rapeseed oil and rapeseed from Canada. Nevertheless, oil mills will pick up their utilization rate for an adequate supply outlook of soybeans, and palm oil has seen its seasonal output growth and high stockpiles in Malaysia. Therefore, oil market will have a ceiling in price bounces due to heavy supply pressure. Short-term oil market may be buoyed to rebound fractionally in choppy trade by concerns over trade disputes. Buyers are suggested to replenish appropriately on the dips to keep safety stockpiles, but not to chase after excessive rises amid uncertainties in trade talks.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,250-5,340 yuan/tonne in domestic coastal areas, a partial rise of 10-20 yuan/tonne. (Tianjin 5,250-5,260, Rizhao 5,290, Zhangjiagang 5,340 and Guangdong 5,280).
Palm oil: 24-degree palm oil is mainly priced at 4,270-4,340 yuan/tonne in coastal areas, a partial loss of 20 yuan/tonne. (Tianjin 4,320-4,330, unchanged; Rizhao 4,340, down 20; Zhangjiagang 4,300, down 20, Guangzhou 4,260-4,270, and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil goes up today, of which it is 7,060-7,200 yuan/tonne in coastal areas, up by 50-80 yuan/tonne partially. (Fujian and Guangdong not offered, and Guangxi 7,200, stable). The United States announced that tariffs on Chinese goods would increase on Friday, and China’s Commerce Ministry said last night that China would have to take necessary countermeasures; hence, trade war is escalating again. Meng Wanzhou is set to appear on the hearing today, where not a decision on whether she will be extradited is made, and her next appearance will be during September 23rd to October 4th. This is a sign that China and Canada will be in a stalemate before September if there is not a thaw between Beijing and Washington. And due to a blocked prospect of rapeseed and rapeseed oil imports, rapeseed oil futures continue their rises on the Zhengzhou Commodity Exchange. Short-term rapeseed oil prices will remain high as there will be supply tensions of rapeseed in July and August since its cargoes from Canada have all been canceled, but its price rises rely mainly on state policies, for its demand is delicate due to its large spread with soybean oil and palm oil. Buyers have to be cautious due to large uncertainties in trade talks between Beijing and Washington.
Cottonseed oil: Cottonseed oil today stays stable with some weak fluctuations of 20-100 yuan/tonne, owing to the limited cottonseed oil volume for blending and the thin trading activity of new orders. However, the market is bolstered when poor crush margin results in low operation rates and output; China's oils market is good with the renewed trade tensions due to the news that U.S. plans to increase tariffs on Chinese goods this Friday and China’s Commerce Ministry said if the U.S. tariff measures were implemented, China would have to take necessary countermeasures; today soybean oil on DCE moves sideways and spots soybean oil partially rises 10-20 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. Pay attention to the situation of U.S.-China trade talks this Friday.
(USD $1=CNY 6.81)
