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Daily Review on Markets for Oilseeds and Oils in China--12/8/2019

2019-08-12 www.cofeed.com

Today (Aug. 12th), 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 from last Friday at 4150 yuan/tonne, and Myanmar soybean with high protein is at 4670 yuan/tonne, unchanged from last Friday. China's market is propped up when imported and distributed soybean in Tianjin port is small and US soybean import is restricted amid U.S.-China trade tension. However, the market is still under the negative situations that it's off-season period and the soybean supply globally is ample due to the bumper crop of South America. The market is mixed and short-term prices likely maintain stable.

Cottonseed: Cottonseed prices today are partially stable 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 most of oil mills halt the operation due to poor crush margin, and the mills that are operating are reluctant to purchase. Short-term price is likely to fluctuate greatly. Buyers are suggested to make a small replenishment upon low price.

Oils: 

Summary: U.S. soybean extended gains last Friday night on dry weather in U.S. production regions, and oil futures also continue the uptrend due to the arbitrage of buying oils and selling meals on the Dalian Commodity Exchange today. In the spot market, soybean oil increases by 100-200 yuan/tonne and palm oil by 100-120 yuan/tonne, and the total trading remains little as buyers remain cautious. The import cost for soybean and oils has increased due to rises of premiums and freights of South American soybeans and the devaluation of the RMB exchange rate below 7, as well as trade frictions between China and the United States, so domestic oil futures have been buoyed. Moreover, while soybean crush remains at a low level, soybean oil shipment has significantly increased as the market is busy stocking up for the holidays, sending its inventory to decline by 1% weekly to 1.376 mln tonnes. And palm oil inventory also reduced by 7.7% weekly to 556,000 tonnes. As its fundamentals are improving, the oil market is predicted to maintain its strong trend in the short term. But the demand is reducing after the price hit its current level rapidly and significantly, so participants still need to remain cautious when following the price rises on the back of futures.  

Soybean oil: GB Grade I soybean oil is mainly priced at 5,980-6,250 yuan/tonne in domestic coastal areas, up by 100-210 yuan/tonne. (Tianjin 6,030-6,040, Rizhao 5,980, Zhangjiagang 6,250, and Guangzhou 6,180). 

Palm oil: 24-degree palm oil is mainly priced at 4,710-4,850 yuan/tonne in coastal areas, up by 100-140 yuan/tonne. (Tianjin 4,800-4,810, up 120; Rizhao 4,850, up 140; Zhangjiagang 4,760, up 110; Guangzhou 4,710, up 100; and Xiamen 4,730, up 90).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 50-80 yuan at 7,200-7,350 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,280, up 50). The import of rapeseed and rapeseed oil from Canada is still confronted with pending issues between Beijing and Ottawa, and rapeseed supply in China is getting tightened. Besides, buyers are busy stocking up packing oil ahead of the festivals, sending rapeseed oil inventory to fall by 5.6% to 482,000 tonnes last week. Rapeseed oil market is shored up to maintain strong. But its demand is influenced by its big price gap with soybean oil, in addition to huge soybean arrivals at port, so its price rises are restricted. Buyers can make small replenishment on the dips and remain cautious in chasing up prices. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 100-200 yuan/tonne when operation rate and output are both low; today oils on DCE extend the rise on arbitrage of buying oils and selling meals, spot soybean oil up 100-200 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 go strong and buyers had better maintain proper stock level upon low price and be prudent if chasing high.

(USD $1=CNY 7.02)