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Daily Review on Markets for Oilseeds and Oils in China

2019-05-13 www.cofeed.com
      Today (May. 13th), 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 last Friday, and non-GM Russian soybean is unchanged at 3,400 yuan/tonne from last Friday and the GM is not offered. The imported and distributed soybean market in China are favourable on traders' mindset for high offers as the decreasing supply in Tianjin port and good demand. However, Argentina's soybeans are 67.4% harvested, and CONAB raised the forecast of 2018/19 Brazilian soybeans crop up 500,000 tonnes to 114.313 million tonnes. The bumper crop harvest in South America and huge global supply still still curbs China's imported and distributed soybean market. Accordingly, the fluctuation of short-term prices are likely curbed.

      Cottonseed: Cottonseed prices today partially rise 0.02-0.1 yuan/kg with the decreasing cottonseed quantity putting pressure on  market supply and the optimistic outlook supporting traders' selling-loath mood. 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 continued to end lower last Friday upon a bearish report by the USDA and a pending trade deal in trade talks last week, during which the United States officially raised its tariffs from 10% to 25% on $200 billion worth of Chinese goods and after which it was seeking to impose additional tariffs the remaining imports valued at $300 billion whose details might be released on Monday today. And oil futures also post a weaker trend than expected to fluctuate to inch down on the Dalian Commodity Exchange pressured by fundamentals. In spot markets, soybean oil broadly stays stable with some ups and downs of 10-30 yuan/tonne, and palm oil falls by 10-30 yuan/tonne, both in tepid trade. Theoretically, domestic market should have reacted positively to the sudden and worse development of U.S.-China trade, but oil market has grasped inadequate impetus to rebound as soybean oil inventory keeps rising under a growing soybean crush of 1.67 mln tonnes last week and an outlook of 1.80-1.90 mln tonnes in the coming two weeks, in addition to seasonal output growth and high stockpiles of palm oil in Malaysia. Overall, short-term oil is still likely to fluctuate to rebound slightly on worries about trade disputes. Buyers are suggested to replenish properly on the dips and remain cautious in driving up prices. 

      Soybean oil: GB Grade I soybean oil is mainly priced at 5,240-5,340 yuan/tonne in domestic coastal areas, a partial fluctuation of 10-30 yuan/tonne. (Tianjin 5,240-5,250, Rizhao 5,260, Zhangjiagang 5,340 and Guangdong 5,270).

      Palm oil: 24-degree palm oil is mainly priced at 4,240-4,320 yuan/tonne in coastal areas, down 10-30 yuan/tonne. (Tianjin 4,300-4,310, down 20; Rizhao 4,320, down 10; Zhangjiagang 4,360, down 30, Guangzhou 4,240, down 10, 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). China and Canada will stay in a stalemate as there is still not a deal concluded between Beijing and Washington, so that rapeseed oil and rapeseed import may remain in question. Mills are propping up prices as cargoes have all been canceled after May. But rapeseed oil has been trading bleakly due to its enlarging spread with soybean oil and palm oil, sending its inventory to increase by 7% in coastal areas last week. Moreover, mills have picked up their utilization rate while scooping up on profitable South American soybeans, and palm oil imports are also growing. Overall, short-term rapeseed oil may maintain its high prices, but buyers had better not drive up prices amid huge uncertainties in state policies. 

      Cottonseed oil: Cottonseed oil today stays stable with a rise of 20-50 yuan/tonne when poor crush margins result in low operation rates and output and a strong cottonseed price provides support for the cost of cottonseed oil. Additionally, The United States and China appeared at a deadlock over trade negotiations last week and U.S. has increased tariffs on 200 billion U.S. dollars worth of Chinese goods and would impose additional tariffs on the remaining $300 billion U.S. dollars worth of Chinese goods. More details would be published on Monday. Although the heated trade war props up oils market, cottonseed oil prices are dragged down by the limited cottonseed oil volume for blending, light trade of new orders, and a slight fluctuating slip of oils on DCE due to high fundamental pressure. Short-term cottonseed oil is likely to stay stable with strong fluctuations and buyers are suggested to take a hand-to-mouth buying strategy.

       (USD $1=CNY 6.83)