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Daily Review on Markets for Oilseeds and Oils in China--30/8/2019

2019-08-30 www.cofeed.com
Today (Aug. 30th), 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 yesterday at 4050 yuan/tonne, and Canada soybean is unchanged from yesterday at 4860 yuan/tonne. China's market is propped up when imported and distributed soybean in Tianjin port is small; demand turns better; US soybean import in the short run is restricted amid U.S.-China trade uncertainty. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely maintain stable.

Cottonseed: Cottonseed prices today are partially stable with most purchase activities suspending, due to tight supply of cottonseed, even though the marketing of some new cottonseed after the 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 are suggested to wait and see as bulk oils fall back.

Oils: 

Summary: U.S. soybeans continued closing with gains last night as the market was concerned about the impact of frost on the production, but oil futures fluctuate to decline on the Dalian Commodity Exchange today. Domestic prices fall on hope for the restart of trade talks because China’s Ministry of Commerce said that the trade teams of China and the United States have maintained effective communications, and China makes a stand against any escalation in trade war and is willing to settle the disputes through negotiation and cooperation with a calm attitude. Besides, a report by Bloomberg implied that China would not promptly take countermeasures against new tariffs by the United States, and Donald Trump said on Thursday that the United States had on that day scheduled a talk with China about trade issues. In the spot market, soybean oil prices mostly stay stable with some ups and downs by 10-20 yuan/tonne, and palm oil prices drop by 60-70 yuan/tonne in tepid trading. Oil futures fluctuate frequently due to mixed and uncertain signs from trade relationship between China and the United States. And soybean crush is predicted to go above 1.80 mln tonnes both this week and next week amid eased meal pressure, but the demand for oils has slowed down in the past few days as the restocking for the festival is about to end in mid-September. Therefore, the oil market is put under pressure to fall again. However, soybean oil inventory keeps decreasing across China, and soybean import cost have been lifted by rising premiums of Brazilian soybeans, sustained devaluation of Chinese yuan and growing ocean freight. And the import margins of South American soybean oil have also seen slight price inversion again. Hence, oil spot prices still remain resilient. Oil futures extend losses in afternoon trading after lower opens today, so buyers can just wait for the moment while focusing on new reports about U.S.-China trade relationship and the weather impact on U.S. soybean crops. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,030-6,230 yuan/tonne in domestic coastal areas, partially fluctuating by 10-20 yuan/tonne. (Tianjin 6,030-6,040, Rizhao 6,080, Zhangjiagang 6,230, and Guangzhou 6,140). 

Palm oil: 24-degree palm oil is mainly priced at 4,780-4,840 yuan/tonne in coastal areas, down by 60-70 yuan/tonne. (Tianjin not offered; Rizhao not offered; Zhangjiagang 4,840, down 60; Guangzhou 4,780, down 70; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 30-50 yuan at 7,460-7,550 yuan/tonne in coastal areas. (Fujian 7,450, down 50; Guangdong not offered; and Guangxi 7,550, down 30). The demand for rapeseed oil is subject to the enlarged price gap with soybean oil and palm oil. In addition, mills will raise their operation rate due to eased meal inventory, so that soybean crush may go to a high level above 1.80 mln tonnes both this week and next week. Rapeseed oil market is thus negative. However, rapeseed supply will get tightened in later period as there is no much practical improvement in relationship between Beijing and Ottawa. Besides, global rapeseed may also see tight supply due to a cut in Canadian rapeseed production, which will help boost international import cost. In the context of insufficient imports, rapeseed oil may have limited price declines and remain at the high level on the whole. As futures prices are in the correction territory, buyers can wait for the moment. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 100 yuan/tonne for some prices. The market is supported by the low operation rates and stock as well as a quick delivery pace in some factories. However, the upward potential is dragged down due to the limited consumption for cottonseed oil as blending oils, and the slowing-down demand as the restocking ahead of holiday is about to end in the middle of September. Short-term cottonseed oil is likely to stay stable with strong trend. Buyers are suggested to wait and see as today oils future fall back. The economic and trade negotiation teams of China and the United States have maintained effective communication and China hope the United States can meet China halfway and properly solve the economic and trade disputes between the two countries on the basis of equality and mutual respect, the Ministry of Commerce (MOC) said Thursday. And President Donald Trump said Thursday that the U.S. and China are scheduled to have a conversation about trade today, and Trump’s comments followed signs from China that it wouldn’t immediately retaliate against the latest U.S. tariff increase, according to Bloomberg. Therefore, today staple oil commodity fall back, and please pay attention to the effect on cottonseed oil market.

(USD $1=CNY 7.09)