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Daily Review on Markets for Oilseeds and Oils in China--22/8/2019

2019-08-22 www.cofeed.com
Today (Aug. 22nd), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

Imported soybean: Imported soybean price declines today, among which Russian soybean is down 160 yuan/tonne from yesterday at 3990 yuan/tonne, and Canada soybean is down 20 yuan/tonne from yesterday at 4860 yuan/tonne. The market is still under the negative situations that the demand is normal and the soybean supply globally is ample due to the bumper crop of South America soybean, which China is active in purchasing. However, 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 conflicts. Short-term prices likely turn 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 cottonseed trading is not much as only a few mills are operating due to poor crush margin. Short-term cottonseed is likely to go strong. Buyers thereby had better make a small replenishment upon low prices and not chase high bids too far.

Oils: 

Summary: U.S. soybean closed higher last night as the Pro Farmer Midwest Crop Tour found pod counts this year were below the average in both Nebraska and Indiana, and on the Dalian Commodity Exchange today, soybean oil futures fluctuate to edge higher and palm oil shows huge gains due to an estimate for lower production and better export. In the spot market, soybean oil partially goes up by 10-40 yuan/tonne, and palm oil increases by 60-100, with tepid trading overall and some purchases for soybean oil of slight rises. South American soybeans are blessed with good crush margins after huge futures rises in China’s market, so importers bought another 12 cargoes yesterday. And the import of Argentine soybean oil has also been opened due to its import profits. Nevertheless, the delivery of soybean oil in domestic market has slightly slowed down. Therefore, the oil market may have limited space for further rises. However, mills have maintained low operation rate due to swelling soybean meal inventories and the influence of typhoon, while the market is stocking up for the holidays, so soybean oil and palm oil have both seen reducing inventories. Moreover, the inventory of rapeseed and rapeseed oil also continues decreasing in coastal regions. And the relationship between China and the United States are clouded by trade disputes. The overall oil market may remain strong as buyers are busy stocking up packing oil ahead of the Mid-autumn festival, but buyers also need to pay attention to fluctuations at current high prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,980-6,280 yuan/tonne in domestic coastal areas, partially up by 10-40 yuan/tonne. (Tianjin 5,980-5,990, Rizhao 6,020, Zhangjiagang 6,280, and Guangzhou 6,130). 

Palm oil: 24-degree palm oil is mainly priced at 4,840-4,960 yuan/tonne in coastal areas, up by 60-110 yuan/tonne. (Tianjin 4,940-4,950, up 60; Rizhao 4,950-4,960, up 90; Zhangjiagang 4,840, up 70; Guangzhou 4,840, up 110; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 50-80 yuan at 7,600-7,550 yuan/tonne in coastal areas. (Fujian 7,460, up 80; Guangdong not offered; and Guangxi 7,750, up 50). The import of rapeseed and rapeseed oil from Canada is still confronted with pending issues between Beijing and Ottawa, so rapeseed supply in China will get tightened. Meanwhile, buyers are busy stocking up packing oil ahead of the festivals. Therefore, rapeseed oil market is buoyed to go strong. But since the window of rapeseed oil import profits has been opened on the commodity exchange, Chinese importers have begun to make inquiries to European Union, Russia and United Arab Emirates, and they will be triggered to make purchases by further rises. Moreover, a rumor said that some private firms showed more interest in purchasing rapeseed. Besides, there is still a very large price gap between rapeseed oil and soybean oil, and soybean and palm oil imports will also be huge in the next two months. Buyers are suggested not to drive up prices excessively.

Cottonseed oil: Cottonseed oil today stays stable with a rise of 50-100 yuan/tonne when operation rate and stock are both low; oil market is in a busy season of restocking for packing oil amid many orders waiting for delivery; today soybean oil on DCE rises slightly with fluctuations, and sport soybean oil partially goes up 10-40 yuan/tonne. However, the market is weighted on by the limited consumption for cottonseed oil as blending oils. The trends of stable oil commodities are upward. Short-term cottonseed oil is likely to stay stable with upward trend.

(USD $1=CNY 7.05)