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Daily Review on Markets for Oilseeds and Oils in China--28/8/2019

2019-08-28 www.cofeed.com
Today (Aug. 28th), 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 up 60 yuan/tonne from yesterday at 4050 yuan/tonne, and Canada soybean is unchanged from yesterday at 4860 yuan/tonne. The imported and distributed soybean in Tianjing port is small, and an increase in demand for good quality soybean is supportive of prices. Besides, US soybean import is restricted amid  uncertainty over U.S.-China trade relationship. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely maintain stable.

Cottonseed: Xinjiang cottonseed prices today see a rise of 2.76 yuan/kg, and some local cottonseeds go up 0.02 yuan/kg, with most purchase activities suspending, due to the declining supply of cottonseed, and a certain period before the marketing of new cottonseed amid a few cotton harvest in some regions. 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 fell last night on rising good-to-excellent rating for crop conditions and good weather in production regions. On the Dalian Commodity Exchange today, soybean oil extends its losses, but palm oil remains resilient. And in the spot market, soybean oil drops by 20-80 yuan/tonne, and palm oil partially fluctuates by 20-40 yuan/tonne. The trading is tepid amid current wait-and-see sentiment in the market. Soybean crush is predicted to go above 1.80 mln tonnes both this week and next week due to eased soybean meal inventory. And the market is also in slower demand now since the restocking for the festival will basically come to an end in the middle of September. These together drag down the oil market to stay under pressure in the correction territory today. But soybean oil inventory keeps decreasing at home. Besides, the crush margins Brazilian soybeans have been smaller after a rise in price, and soybean oil has also lost its import profits. Meanwhile, tensions still protract between Washington and Beijing. Overall, there is still little room for correction in the short term, and it is early to say the market has go far from the strong trend. Buyer can wait for low and stable prices to make replenishment in small batch. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,980-6,230 yuan/tonne in domestic coastal areas, down by 20-80 yuan/tonne. (Tianjin 5,980-6,000, Rizhao 6,080, Zhangjiagang 6,230, and Guangzhou 6,080). 

Palm oil: 24-degree palm oil is mainly priced at 4,890-4,990 yuan/tonne in coastal areas, partially fluctuating by 20-40 yuan/tonne. (Tianjin not offered; Rizhao 4,990, up 20; Zhangjiagang 4,920, flat; Guangzhou 4,890, up 40; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 20-30 yuan at 7,520-7,670 yuan/tonne in coastal areas. (Fujian 7,520, down 20; Guangdong not offered; and Guangxi 7,670). The demand for rapeseed oil is capped by its enlarged price gap with soybean oil and palm oil. Besides, due to eased soybean meal inventory, mills have substantially increase soybean crush, which is predicted to reach the high level of 1.82 mln tonnes this week and 1.85 mln tonnes next week. These is negative to the rapeseed oil market. But rapeseed will be in tight supply since China and Canada have made little improvement in bilateral relationship. And domestic market is still stocking up packing oil in full swing, which will help limit price declines. The overall market is expected to stay at the high level, and buyers can wait for the moment on account of technical corrections of futures. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 300 yuan/tonne. The market is supported by the low operation rates and stock, the ongoing busy season of packing oil restocking, a quick delivery pace in some factories. However, cottonseed oil is weighted on by the limited consumption for cottonseed oil as blending oils. Besides, the restocking is at later stage. And today soybean oil on DCE further declines, and sport soybean oil is lower 20-80 yuan/tonne. Short-term cottonseed oil is likely to stay stable with strong trend. Buyers can just wait on the sidelines.

(USD $1=CNY 7.08)