Today is 08/09/2020

Daily Review on Markets for Oilseeds and Oils in China--5/9/2019

Today (Sept. 5th), 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 Kazakhstan soybean is unchanged from yesterday at 4570 yuan/tonne. China's market is propped up when imported and distributed soybean in Tianjin port is small; demand is relatively good. Today Chiefs of China-U.S. Comprehensive Economic Dialogue held a phone conversation and agreed to hold the trade consultations in early October in Washington. Working groups of the two sides will conduct consultations in earnest in mid-September to make full preparations for the high-level talks to achieve substantial progress. Before any progress from the consultations, the US soybean import is still restricted. 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. However, the cottonseed trading is not much as the moisture of new cottonseed is high; the purchase of old cottonseed stops; and operation rate are low. With the upcoming marketing of new cottonseed, the price is likely to change, and buyers can maintain wait-and-see attitudes and do not chase high.

Oils: 

Summary: U.S. soybean ticked higher yesterday on purchase order from Mexico. And on the Dalian Commodity Exchange today, soybean oil hovers below its previous close in spite of some gains, and palm oil falls further after India confirmed an increase of 5% tariff on refined palm oil from Malaysia and Chinese importer bought 15 cargoes of palm oil yesterday with most shipments in October. In the spot markets, soybean oil mostly snaps off declines to steady with some fluctuations of 20-50 yuan/tonne, and palm oil slips by 60-80 yuan/tonne in tepid trading. Trade representatives from China and the United States had a phone talk today where both sides agreed to hold another round of negotiations in Washington in earlier October and start to embark on consultations from mid-September in preparation for substantial progress in the meeting. This is bearish to the oil market. Moreover, while mills have sharply picked up their operation rate in recent weeks, the market is about to complete restocking edible oils in mid-September; hence, oil market has come under pressure again. But soybean import cost has surged on rising premiums of Brazilian soybeans and growing concerns about tight supply in the fourth quarter in South America. And the import margins of South American soybean oil have also seen slight price inversion again. So oil price declines are curbed. On the whole, oil market is predicted to fluctuate and adjust with the resumption of trade talks and the forthcoming sales of U.S. soybeans, and buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,070-6,270 yuan/tonne in domestic coastal areas, some fluctuating by 20-50 yuan/tonne. (Tianjin 6,070-6,080, Rizhao 6,080, Zhangjiagang 6,270, and Guangzhou 6,190). 

Palm oil: RBD palm olein is mainly priced at 4,780-4,870 yuan/tonne in coastal areas, down by 60-80 yuan/tonne. (Tianjin 4,810-4,820, down 70; Rizhao 4,870, down 60; Zhangjiagang 4,820, down 80; Guangzhou 4,780, down 70; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 10-40 yuan at 7,440-7,580 yuan/tonne in coastal areas. (Fujian 7,440, down 30; Guangdong not offered; and Guangxi 7,520, down 30). The demand for rapeseed oil is subject to its enlarged price gap with soybean oil and palm oil, mills have picked up their soybean crush to a very high level recently, and the market has slowed down its demand as it is about to complete restocking in mid-September; hence, rapeseed oil market is weighed down. But the import of Canadian rapeseed oil and rapeseed is still difficult as it is unlikely for China and Canada to settle their issues in short period, and rapeseed oil inventory will run out by the end of December. Dealers are now propping up prices, so rapeseed oil market is shored up. The market will have little downside space in the short term and may fluctuate narrowly at the high level and stay strong overall. As futures are now in the correction territory, buyers can wait for the moment. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 20 yuan/tonne for some prices due to small marketing of new cottonseed, the low operation rate and low cottonseed oil inventory. However, the demand slow down with the ending of small-packing oil restocking. And the consumption of cottonseed oil for blending is not a lot. Besides, today Chiefs of China-U.S. Comprehensive Economic Dialogue held a phone conversation and agreed to hold the trade consultations in early October in Washington. Working groups of the two sides will conduct consultations in earnest in mid-September to make full preparations for the high-level talks to achieve substantial progress. All these are negative to market, and cottonseed oil is likely to fluctuate before the massive marketing of new cottonseed. Buyers can just wait on the sidelines.

(USD $1=CNY 7.09)