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Daily Review on Markets for Oilseeds and Oils in China--23/9/2019

Today (Sept. 23), 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  3750 yuan/tonne, and Canada soybean with 43% protein is down 170 yuan/tonne from last Friday at 4600 yuan/tonne. The market is bearish when traders make a lower quotation to clear their stocks amid the marketing of new soybeans. However, amid the upcoming high-level trade consultation on Oct. 10, according to Bloomberg, the uncertainty over US-China trade talks is supportive of the price. And US soybean import in short run may still be restricted.  The market is mixed and short-term prices likely turn stable.

Cottonseed: Cottonseed prices today are partially stable with fluctuations of 0.02~0.1 yuan/kg and most purchase activities suspending. A few supply of new cottonseed is supportive of price. However, the market is dragged down as most mills take a wait-and-see attitude and mills in Shandong have a plan of operation halts, which is due to the pressure from the environmental policy and the approach of China's National-Day holiday. The price is likely to make a proper drop in the wake of marketing, and buyers could take wait-and-see attitude.

Oils: 

Summary: President Donald Trump said he was “not looking for a partial deal” with Beijing, and the Chinese trade delegation canceled a planned visit to US farms, which raised a question about any breakthrough in bilateral trade talks. US soybeans thus fell last Friday, and oil futures also fluctuate to drop after rebounding in the early trading on the Dalian Commodity Exchange today. Spot oil prices are mostly stable, of which soybean oil and palm oil post a partial fluctuation of 10-30 yuan/tonne in tepid trading. Soybean crush rose by 1.6% to 1.83 mln tonnes last week, and soybean oil inventory thus increased by 1.3% to 1.348 mln tonnes. But the festival demand was over at home, US soybeans in the new season are about to be harvested and go marketing soon, and China and the United States are to hold high-level trade talks probably on October 10th. Short-term oil spot prices will thus continue to fluctuate to decline in the wake of futures. However, most mills have planned for downtime due to the National Day holiday and the parade, so soybean oil inventory will post smaller growth and its short-term price is thus predicted to have limited downside space. Oil market recently may set the tone for a pattern with fluctuations and slight declines, and buyers can wait for low and stable prices to make proper replenishment on the dips. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,980-6,210 yuan/tonne in domestic coastal areas, fluctuating partially by 10-30 yuan/tonne. (Tianjin traders 5,980-5,990, Rizhao traders 6,040, Zhangjiagang traders 6,210, and Guangzhou traders 6,090). 

Palm oil: RBD palm olein is mainly priced at 4,760-4,890 yuan/tonne in coastal areas, partially up 10 yuan/tonne. (Tianjin traders 4,800-4,810, up 10; Rizhao traders 4,890, flat; Zhangjiagang traders 4,840, up 10; Guangzhou traders 4,760, up 10; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 10-20 yuan/tonne at 7,420-7,520 yuan/tonne in coastal areas. (Fujian 7,420, up 20; Guangdong not offered; and Guangxi 7,800). The trade relationship is still unsteady between China and the United States, and the import of rapeseed and oil from Canada is also affected by pending issues between Beijing and Ottawa, so rapeseed supply is getting tightened. Rapeseed oil inventory declined by 6% to 416,000 tonnes last week, helping the market to stay relatively strong. But the demand for rapeseed oil is influenced by its relatively huge price gap with soybean oil, and Chinese importers are buying up on palm oil substantially, which increases domestic oil supply. Besides, the festival demand has been over. Short-term rapeseed oil may fluctuate at the high level to adjust, and buyers can wait or take hand-to-mouth buying. 

Cottonseed oil: Cottonseed oil today stays stable due to the low operation rate and almost non-inventory. However, the market is dragged down by the ending of small-packing oil restocking and the limited consumption of cottonseed oil for blending. Cottonseed oil is likely to see stay stable with fluctuations before the massive marketing of new cottonseed, and then see a proper drop after the massive marketing. Buyers can stay on the sideline for now. Market doubts whether there will be a progress in trade war after President Trump rejected suggestions that the U.S. would accept a partial trade agreement with China according to Bloomberg, and Chinese trade delegation called off farm visits. Buyers should pay attention to the latest news about trade talks amid a high-level trade consultation on around Oct. 10.

(USD $1=CNY 7.07)