Today (May. 10th), 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, the United States has increased additional tariffs on 200 billion U.S. dollars worth of Chinese goods from 10 percent to 25 percent, and China’s Commerce Ministry said China would have to take necessary countermeasures. The trade tensions increase. This round of talks is still ongoing in Washington and ahead of any specific result from the talks, the fluctuations of short-term prices for imported soybean in distribution market are likely to be limited.
Cottonseed: Cottonseed prices today are stable with a rise of 0.02-0.04 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 slumped for a second session upon concerns over U.S.-China trade frictions. And oil futures also fall moderately on the Dalian Commodity Exchange today, for Chinese oil mills have bought at least 15 cargoes of soybean from Brazil this week due to its handsome crush margins and palm oil has seen its seasonal output growth and high stockpiles in Malaysia. In spot markets, soybean oil partially goes down 20-50 and palm oil down by 10-20 yuan/tonne in light trading. U.S. tariff increase on Chinese goods has already taken effect at 12:00 ET today, and China's Commerce Ministry said that it would take countermeasures. Growing concerns on trade disputes will continue to boost oil market. But oil market is now subject to bad fundamentals, and will continue to come under pressure if a trade deal is materialized, otherwise, it will fluctuate to go upward gradually. Buyers can wait for steady declines to make replenishment and focus on the trade talk outcomes.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,230-5,330 yuan/tonne in domestic coastal areas, a partial loss of 20-50 yuan/tonne. (Tianjin 5,230-5,240, Rizhao 5,270, Zhangjiagang 5,330 and Guangdong 5,260).
Palm oil: 24-degree palm oil is mainly priced at 4,270-4,340 yuan/tonne in coastal areas, down 20 yuan/tonne. (Tianjin 4,310-4,330, down 20; Zhangjiagang 4,300, down 10, Guangzhou 4,260-4,270, down 20, and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily goes up today, of which it is 7,060-7,200 yuan/tonne in coastal areas, up by 10-20 yuan/tonne. (Fujian and Guangdong not offered, and Guangxi 7,200, stable). As Meng Wanzhou will make her next appearance on September 23rd, China and Canada will be in a stalemate before that if there is not a thaw between Beijing and Washington. Therefore, oil mills are propping up prices amid a tight supply outlook in July and August since rapeseed cargoes have all been canceled. But rapeseed oil has been trading bleakly due to its enlarging spread with soybean oil and palm oil. Moreover, soybean crush has been rising as oil mills are scooping up on profitable South American crops, and palm oil imports are also increasing. Overall, short-term rapeseed oil prices will remain high, but buyers need to be cautious in case of policy uncertainties.
Cottonseed oil: Cottonseed oil today stays stable with some strong fluctuations of 20-50 yuan/tonne when poor crush margins result in low operation rates and output; the strong adjustment of cottonseed provides support for cottonseed oil cost. However, some factors drag down cottonseed oil market: the cottonseed oil volume for blending is not much; new orders are light; today oils on DCE mildly slip back and spots soybean oil partially declines 20-50 yuan/tonne due to profitable Brazilian soybean crush as well as a seasonal increase of Malaysian palm oil crop and its high stock. Short-term cottonseed oil is likely to stay stable with fluctuations at a narrow range and buyers are suggested to take a hand-to-mouth buying strategy. The U.S. tariff increase has taken effect from 12:01 a.m(EDT) today and the concern over trade talks will provide support for oils market again. Please pay attention to the news about the results of trade talks.
(USD $1=CNY 6.82)
