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Daily Review on Markets for Oilseeds and Oils in China--7/8/2019

2019-08-07 www.cofeed.com
Today (Aug. 7th), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

Imported soybean: Imported soybean price is steady today, among which Russian soybean is unchanged at 4150 yuan/tonne from yesterday. China's market is propped up when imported and distributed soybean in Tianjin port is small and US soybean import is restricted amid the U.S.-China trade conflicts as related Chinese companies have halted purchases of U.S. farm produce, according to the Ministry of Commerce. However, the market is still under the negative situations that it's off-season period and the soybean supply globally is ample. The market is mixed and short-term prices likely maintain stable.

Cottonseed: Cottonseed prices today are flat and partially up 0.04 yuan/kg with most purchase activities suspending, due to the declining supply of cottonseed, and a certain period before the marketing of new cottonseed. However, the upward potential is curbed because the cottonseed trading is not much as oil mills are reluctant to purchase and some mills mainly use its own stock due to poor crush margin. Short-term price is likely to fluctuate greatly. Buyers are suggested to make a small replenishment upon low price.

Oils: 

Summary: Due to improved weather conditions in US crop planting regions, lingering worries over the escalation of US-China trade tensions and lower feed demand in China under the African swine fever, US soybean futures fell last night, and soybean oil slows down gains and palm oil snaps off rises to decline on the Dalian Commodity Exchange today. The spot market is mostly stable with soybean oil partially increasing by 10-20 yuan/tonne and palm oil partially down by 10-20 yuan/tonne to see some low-level purchases in tepid trading. Oil futures show weaker upward potential after consecutive and broad gains and oil spot prices also see limited rises, which can be attributed to technical corrections and huge import of soybean and palm oil in the coming two months. But the premium of Brazilian soybeans has surged by 40 cents, and soybean import cost has been lifted after the RMB fell below 7. Moreover, soybean crush stays at a low level due to swelling soybean meal inventory and the upcoming typhoon, so soybean oil output is decreasing. Meanwhile, soybean oil is in rapid deliveries due to the stockpiling in the run up to the double festivals, and palm oil inventory is also reducing. Overall, short-term oil market is predicted to be on the strong side and see little downside space even if there is declines. On account of fluctuations on the DCE, buyers can wait for low and stable prices to make proper replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5,600-5,780 yuan/tonne in domestic coastal areas, up by 10-20 yuan/tonne partially. (Tianjin 5,600-5,610, Rizhao 5,590, Zhangjiagang 5,780, and Guangzhou 5,720-5,730). 

Palm oil: 24-degree palm oil is mainly priced at 4,490-4,570 yuan/tonne in coastal areas, down by 20 yuan/tonne partially. (Tianjin 4,540-4,550, down 20; Rizhao 4,570, flat; Zhangjiagang 4,530, flat; Guangzhou 4,490, down 20; and Xiamen 4,520, down 10).

Imported rapeseed oil: Imported rapeseed oil steadily edges up in price today, of which it settles up 10 yuan partially at 6,980-7,120 yuan/tonne in coastal areas. (Fujian not offered; Guangdong 6,980, up 10; and Guangxi 7,120, stable). The import of rapeseed oil and rapeseed from Canada to China is still blocked by pending issues between these two countries, and rapeseed supply will get tightened before a detente. Besides, the market is now busying stockpiling packing oil. Therefore, rapeseed oil market is buoyed to stay strong. But the demand for rapeseed oil is severely cut by its enlarged price spread with soybean oil and palm oil, whilst oil is in adequate supply in China at the moment. And soybean crush will increase as soybean import is predicted to be 9.10 mln tonnes and 9.20 mln tonnes in August and September respectively. Rapeseed oil prices may thus have limited rises. Buyers had better not drive up prices excessively for the moment. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 100 yuan/tonne for some prices when operation rates are low; the busy season of packing-oil restocking ahead of the holiday starts; today oils on DCE continue to rise, spot soybean oil partially goes up 10-20 yuan/tonne. However, the market is weighted on by the limited consumption for cottonseed oil as blending oils. Short-term cottonseed oil is likely to fluctuate greatly and buyers had better maintain proper stock level upon low price and be prudent if chasing high.

(USD $1=CNY 7)