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Daily Review on Markets for Oilseeds and Oils in China--13/8/2019

2019-08-13 www.cofeed.com
Today (Aug. 13th), 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 not offered for out of stock. 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 bumper crop harvest in South America and huge global supply still curbs China's imported and distributed soybean market amid the suspension of China's purchase for US soybean, and the ABIOVE's estimate of Brazilian soybean import increase. The market is mixed and short-term prices likely maintain stable.

Cottonseed: Xinjiang raw cottonseed delivered prices today are up to 2.60-2.66 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 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 go strong. Buyers are suggested to make a small replenishment upon low price.

Oils: 

Summary: U.S. soybeans fell on the back of a sharp loss in U.S. corn futures and protracted trade disputes between Beijing and Ottawa, and on the Dalian Commodity Exchange (DCE), soybean oil snaps off gains to decline as some traders close their positions in the arbitrage of buying oils and selling meals with the rebounds of soybean meal and palm oil also slows down its gains. In the spot markets, soybean oil stops climbing higher to decline partially by 20-50 yuan/tonne and palm oil mostly increases by 10-40 yuan/tonne, with the trading being tepid. Futures on the DCE are in technical correction territory after consecutive surges, and downstream buyers stay far from the market after oil mills continued to raise prices in the last few days; hence, the oil market breaks off rises and steps into adjustments. But 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 protracted trade frictions between China and the United States. Meanwhile, soybean oil shipment has significantly increased as the market is busy stocking up for the holidays, and palm oil inventory is also decreasing. Besides, U.S. soybean crops are now in the critical period of growth, which requires very favorable weather condition, especially under a sharp cut in planting acreage, and there may be more weather speculations later.Overall, the oil market is predicted to maintain its strong trend with little downside space, and buyers can wait for lower prices to make replenishment. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,980-6,200 yuan/tonne in domestic coastal areas, some down by 20-50 yuan/tonne. (Tianjin 6,020-6,030, Rizhao 5,980, Zhangjiagang 6,200, and Guangzhou 6,120). 

Palm oil: 24-degree palm oil is mainly priced at 4,750-4,880 yuan/tonne in coastal areas, up by 10-40 yuan/tonne. (Tianjin 4,830-4,840, up 10; Rizhao 4,880, up 30; Zhangjiagang 4,800, up 40; Guangzhou 4,750, up 20; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil steadily fluctuates in price today, of which it goes ups and downs by 20-50 yuan to settle at 7,180-7,300 yuan/tonne in coastal areas. (Fujian 7,250, stable; Guangdong not offered; and Guangxi 7,280, stable). 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 oil inventory to fall sharply last week. Oil mills are now in quick shipments. Besides, there may be much more weather speculations on US soybean yield later as the USDA report has indicated a sharply lower-than-expected planting acreage. Therefore, rapeseed oil is buoyed to stay on the strong side. But rapeseed oil whose demand is influenced by its high prices has seen smaller price rises that soybean oil. Buyers had better not drive up prices too high for the moment. 

Cottonseed oil: Cottonseed oil today mostly increase 100-400 yuan/tonne with partial stable price, when operation rate and output are both low; yesterday spot soybean oil went up 100-200 yuan/tonne. However, cottonseed oil consumption for blending oil is at a limited level. Short-term prices are likely to go strong. Buyers therefore had better not chase bids high.

(USD $1=CNY 7.03)