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Daily Review on Markets for Oilseeds and Oils in China--17/9/2019

Today (Sept. 17th), 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 3990 yuan/tonne, and Canada soybean is unchanged from yesterday at 4930 yuan/tonne. USDA confirmed on Monday that US private exporters sold 256,000 tonnes of US soybean to China. And according to Xinhua news, upon invitation from the U.S. side, Liao Min, deputy director of the Office of the Central Commission for Financial and Economic Affairs and vice Finance Minister, plans to lead a delegation to visit the United States on Wednesday for trade consultations. The visit will pave the way for the 13th round of China-U.S. high-level economic and trade consultations in October in Washington. If the trade talks go well, more US soybean imports are expected. The outlook of import increase is negative to domestic market. However, an insufficient inventory of distributed soybean is supportive of China's market. The market is mixed and short-term prices likely maintain stable.

Cottonseed: Cottonseed prices today stable with a drop of 0.02 yuan/kg and most purchase activities suspending when the new cottonseed is small in quantity and high in price. The down stream takes wait-and-see attitude and oil mills are not eager to purchase. However, the price decline pace is limited by the tight supply before the marketing of new cottonseed. The price is expected to fall a bit after the massive marketing. Buyers should stay on the sideline for now.

Oils: 

Summary: US soybean rose on the surge in crude oil prices after the attacks in Saudi Arabia, and oil futures also extend gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil increases by 50-90 yuan/tonne and palm oil up by 90-110 yuan/tonne, but the trading remains tepid as buyers are cautious. This round of price rises in oil market is mainly buoyed by the surge in crude oil prices, since the fundamentals of the market is actually weak at present. Soybean crush fell slightly by 0.7% to 1.80 mln tonnes last week as some mills in South China were bothered by swelling soybean meal inventory, so that soybean oil inventory followed to drop by 0.1% to 1.33 mln tonnes. But the decline is very small, and palm oil arrivals will be huge in September and October, so the oil market is still in adequate supply. China's Finance Vice-Minister Liao Min has planned to lead a delegation to visit the United States on Wednesday for economic and trade consultations, which will pave the way for the high-level consultations next month in Washington. Before this, the United States postponed the deadline of additional tariffs on Chinese goods, and China restarted the purchases of US farm products with five privately-owned firms being said to be allowed to import 5 millions tonnes of US soybeans free from additional tariffs. The detente in trade disputes, the upcoming harvest and sales of US soybeans, and the completion of restocking ahead of the festival will all keep oil prices under check in the middle trend. Oil futures both yesterday and today have opened sharply higher in early trading and then to pare gains, so buyers are suggested not to drive up prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,080-6,340 yuan/tonne in domestic coastal areas, up by 50-90 yuan/tonne. (Tianjin traders 6,080-6,090, Rizhao traders 6,140, Zhangjiagang traders 6,340, and Guangzhou traders 6,230). 

Palm oil: RBD palm olein is mainly priced at 4,950-5,100 yuan/tonne in coastal areas, up by 90-110 yuan/tonne. (Tianjin traders 4,970-4,980, up 100; Rizhao traders 5,100, up 110; Zhangjiagang traders 5,030, up 100; Guangzhou traders 4,950, up 90; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil steps up in price today, of which it settles up 20-30 yuan/tonne at 7,400-7,500 yuan/tonne in coastal areas. (Fujian 7,400, up 30; Guangdong 7,420; and Guangxi 7,520). Rapeseed oil prices will remain high before a thaw in relationship between China and Canada. But Chinese vice ministerial officials will be in Washington for trade talks on Wednesday to pave the way for the high-level consultations next month in Washington. Besides, palm oil arrivals will be huge in September and October, and the market has completed replenishment for the holidays. Moreover, the demand for rapeseed oil is subject to its price gap with soybean oil and palm oil, so that its price rises are obviously smaller than those of soybean oil and palm oil in these two days. Buyers are suggested to keep light stocks. 
Cottonseed oil: Cottonseed oil today stays stable with a rise of 50 yuan/tonne for some prices due to the low operation rate and almost non-inventory. Besides, today oils on DCE further lift, while spot soybean oil and palm oil is up 50-90 yuan/tonne and 90-110 yuan/tonne respectively, which is due to the surge of crude oil after the attack on Saudi. However, the market is dragged down when the small-packing oil restocking is about to end; demand slows down; and the consumption of cottonseed oil for blending is not a lot. Cottonseed oil is likely to stay stable with fluctuations before the massive marketing of new cottonseed, and then fall back a bit. Buyers can take a hand-to-mouth strategy for now. Buyers should pay attention to the news about trade talks as Liao Min, deputy director of the Office of the Central Commission for Financial and Economic Affairs and vice Finance Minister, plans to lead a delegation to visit the United States on Wednesday for trade consultations. The visit will pave the way for the 13th round of China-U.S. high-level economic and trade consultations in October in Washington.

(USD $1=CNY 7.07)