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Daily Review on Markets for Oilseeds and Oils in China--25/9/2019

Today (Sept. 25), 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 3750 yuan/tonne, and Canada soybean with 43% protein is unchanged from yesterday at 4600 yuan/tonne. The market supply is increasing with the marketing of new soybeans, and would further rise later as more US soybean may be imported if  the progress of China-U.S. high-level economic and trade consultations in Oct. goes well, and amid an upbeat trade relationship when according to Bloomberg, China has allowed several state-owned and private firms to import US soybeans without additional tariffs, about 2 to 3 million tonnes. Short-term prices likely maintain stable with weak momentum.

Cottonseed: Cottonseed prices today stable with a drop of 0.08 yuan/kg and most purchase activities suspending when cottonseed price is high; cottonseed oil mills largely halt operation for the National Day and military parade; the trading volume is small as most oil mills take wait and see attitude with only a few making some purchases; the supply increases on the marketing of cottonseed. The prices are likely to further fall back before National Day and buyers may stay on the sideline.

Oils: 

Summary: According to Bloomberg, China has allowed several state-owned and private firms to import US soybeans without additional tariffs, and the report said that new waivers will be about 2 to 3 million tonnes. US soybeans closed higher last night. Oil futures head down further on the Dalian Commodity Exchange today due to the possible sign of the trade detente, but have slowed down declines. In the spot markets, soybean oil and palm oil steadily fluctuate by 10-20 yuan/tonne and may continue to attract some low-level purchases. The trading volume is low in oil markets with the end of the peak demand ahead of the holidays, and soybean crush still stays at a high level, so soybean oil inventory has increased slightly. Meanwhile, the import volume of palm oil is also high. Domestic oil market is now in adequate supply, coupled with upcoming new soybean harvests and sales in the US and the trade detente, so spot soybean oil price is predicted to follow futures to fluctuate and stay relatively weak, but its declines may be subdued as most mills in Shandong and North China have made plans for downtime for the National Day holiday and the parade. Buyers with inadequate stocks are suggested to make replenishment on the dips in small batch and remain cautious in driving up prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,920-6,180 yuan/tonne in domestic coastal areas, fluctuating 10-20 yuan/tonne. (Tianjin traders 5,920-5,930, Rizhao traders 6,010, Zhangjiagang traders 6,180, and Guangzhou traders 6,060). 

Palm oil: RBD palm olein is mainly priced at 4,660-4,820 yuan/tonne in coastal areas, down 20 yuan/tonne partially. (Tianjin traders 4,740-4,750, flat; Rizhao traders 4,810-4,820, flat; Zhangjiagang traders 4,770, flat; Guangzhou traders 4,660-4,680, flat; and Xiamen 4,730, down 20).

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down partially by 20-30 yuan/tonne at 7,300-7,400 yuan/tonne in coastal areas. (Fujian 7,300, flat; Guangdong not offered; and Guangxi 7,400, down 30). The demand for rapeseed oil is subdued by its huge price gap with soybean oil and palm oil. Domestic oil is in huge inventory, and imported palm oil will arrive at domestic ports in huge amount. Meanwhile, US farmers are to harvest and market their soybeans, and domestic buyers are cautious while waiting for the outcome of trade talks next month and the ongoing hearing against HUAWEI Meng Wanzhou. Therefore, short-term rapeseed oil will probably fluctuate frequently at the high level, but the range will be small. Buyers can wait or take hand-to-mouth buying.

Cottonseed oil: Cottonseed oil today stays stable when cottonseed price is high; cottonseed oil mills largely halt operation for the National Day and military parade. However, the market is weighted on as the packing-oil restocking is over; the consumption of cottonseed oil for blending is limited; the trade detente leads to a further decline of oils on DCE today, which follows a news from Bloomberg that China has allowed several state-owned and private firms to import US soybeans without additional tariffs, about 2 to 3 million tonnes. Before National Day holiday, the prices are likely to stay stable with some fluctuations, and after that, move in weak trend. Buyers can stay on the sideline.

(USD $1=CNY 7.07)