Today (May 16th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price rises today, among which non-GM Canadian soybean is not offered for out of stock, and non-GM Russian soybean rises by 50 yuan/tonne from yesterday to settle at 3,450 yuan/tonne, non-GM Kazakhstan soybean rises by 30 yuan/tonne from yesterday to settle at 4,230 yuan/tonne. China's soybean market is favourable on traders' optimistic outlook. The supply in Tianjin port is decreasing, while the demand is good. Besides, U.S. Treasury Secretary Steven Mnuchin said no date yet for next trip to Beijing. the US soybean import in the future is likely affected as there are still some uncertainty over US-China trade talks. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely go strong.
Cottonseed: Cottonseed prices today are stable with some rises of 0.06 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. While oils and meals rebound on the concerns over trade war, short-term cottonseed is likely to go strong. Buyers thereby had better make proper replenishment upon low prices rather than chase high bids too far.
Oils:
Summary: U.S. soybeans saw another rally overnight after President Donald Trump eased concerns about a U.S.-China tariff war. Moreover, palm oil has posted gains for three consecutive sessions on the Bursa Malaysia Derivatives Exchange since its export has increased by 4% to 15% monthly in the first 15 days of May and its output in May is expected to be lower than that in April. Oil futures also extend moderate rises on Dalian Commodity Exchange today. In spot markets, soybean oil and palm oil go up 10-30 yuan/tonne with brisk trading at lower prices. South American soybean crush has seen its net margins fall to 220-260 yuan/tonne due to growing import cost under a weaker RMB, in addition to ongoing tensions between Beijing and Washington, oil market is thus buoyed to rebound. But mills will probably pick up their utilization rate significantly in the next two weeks, which signal the growing trend of soybean oil and palm oil inventories, so rebounds in oil market will be capped by negative fundamentals. Generally, short-term oil market will be shored up to fluctuate to bounce narrowly by worries over trade and may fluctuate frequently upon changes in trade relations. Buyers can continue to replenish on the dips to keep safety stockpiles.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,270-5,360 yuan/tonne in domestic coastal areas, up by 10-20 yuan/tonne. (Tianjin 5,270-5，280, Rizhao 5,300, Zhangjiagang 5,360 and Guangdong 5,310-5,320).
Palm oil: 24-degree palm oil is mainly priced at 4,330-4,,370 yuan/tonne in coastal areas, up 20-30 yuan/tonne. (Tianjin 4,360-4,370, up 30; Rizhao 4,370, up 20; Zhangjiagang 4,320, unchanged; Guangzhou 4,330; and Xiamen 4,430, up 30).
Imported rapeseed oil: Imported rapeseed oil steadily edges higher today, of which it settles up 10-20 yuan/tonne at 7,110-7,300 yuan/tonne in coastal areas. (Fujian and Guangdong not offered, and Guangxi 7,300, stable). There is no rapeseed cargo after May amid tensions between Beijing and Ottawa, so rapeseed oil price will remain high before a thaw in tensions. But rapeseed oil market has few buyers recently as its demand is severely influenced by its enlarging spread with soybean oil and palm oil. Moreover, mills will raise their utilization rate for soybean crush amid huge global soybean supply. So its price rises will be pressure by its fundamentals. Later trend will depend on when Beijing and Ottawa will head towards a thaw, before which rapeseed oil will remain its high price and after which it will take plunge, so buyers are suggested to keep light stockpiles.
Cottonseed oil: Cottonseed oil today stays stable with some strong fluctuations of 50-100 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, today oils on DCE experience a further mild rise, and spots soybean oil and palm oil go up 10-30 yuan/tonne, which is good for cottonseed oil market. However, the cottonseed oil market is curbed by the limited cottonseed oil volume for blending, thin turnover of new orders, and high fundamental pressure in oils market. Short-term cottonseed oil is likely to fluctuate strongly and buyers are suggested to make proper replenishment upon low prices.
(USD $1=CNY 6.88)
