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Daily Review on Markets for Oilseeds and Oils in China--08/10/2019

2019-10-08 www.cofeed.com
Today (Oct. 08), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

Imported soybean: Imported soybean price is steady today, among which Canada soybean with 43% protein is unchanged from that ahead of holiday at 4600 yuan/tonne, and Myanmar soybean is unchanged from that ahead of holiday at 4460 yuan/tonne. The supply increases on the marketing of China's new soybeans. An US-China high-level trade consultation will be held on Oct. 10-11 in Washington. And China has purchased about 3.5 million of US soybean before the consultation, and if it goes well, more US soybeans would be imported. All these are negative to China's market. Short-term prices likely maintain stable with weak momentum.

Cottonseed: Cottonseed prices today decline by 0.1-0.2 yuan/kg from National Day. The cottonseed market is dragged down when the supply is increasing with a large marketing of Xinjiang cottonseed; the freight from Xinjiang to inland goes up; the prices of cottonseed oil and cottonseed meal show a decline. Therefore, short-term cottonseed prices are predicted to keep falling back. In addition, China and U.S. will resume the high-level trade negotiations from Oct. 10 to 11 in Washington, which leads oil mills to be more cautious in cottonseed purchasing. Buyers are suggested to buy on immediate demand.

Oils: 

Summary: US soybeans dropped 1 cent last night to 915.25 cents, but gained 29.85 cents from that session before China’s National Day holiday. The U.S. Department of Agriculture pegged soybean stocks at 913 million bushels as of September 1, below the market estimate of 982 million bushels, and the freeze has sporadically appeared in some parts of the U.S. Midwest. Meanwhile, the U.S. and China are to resume high-level trade negotiations in Washington on October 10 and 11, and China has purchased a total of about 3.5 million tonnes of soybeans ahead of the negotiations, with 914,000 tonnes bought during the National Day holidays. US soybeans were buoyed to rise for several straight sessions, and oil futures also fill up gains after the trading is resumed on the Dalian Commodity Exchange today.In the spot markets, soybean oil rises by 20-60 yuan/tonne from that before the holidays and palm oil also increases by 10-70 yuan/tonne to attract some low-level purchases, but the trading remains tepid for those with huge rises. Soybean crush dropped below 1.20 mln tonnes during the National Day holidays, and is predicted to stay at a low level of 1.40 mln tonnes this week. Meanwhile, the import cost is also pushed higher by huge gains in US soybean prices. Therefore, the oil market is driven to go higher today. But in addition to the purchases of 3.50 mln tonnes of US soybeans, palm oil imports also remain substantial in the next moment. Even though the overall supply is liberal in the market, the demand is turning slack after the holidays, so there is limited space for this round of price rebounds. Buyers are suggested to replenish on the dips for appropriate stocks, but not to drive up prices excessively. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,880-6,080 yuan/tonne in domestic coastal areas, mostly up 20-60 yuan/tonne from that before the holiday. (Tianjin traders 5,880-5,890, Rizhao traders 5,940, Zhangjiagang traders 6,080, and Guangzhou traders 5,970). 

Palm oil: RBD palm olein is mainly priced at 4,680-4,820 yuan/tonne in coastal areas, up 10-70 yuan/tonne. (Tianjin traders 4,750-4,770, up 10; Rizhao traders not offered; Zhangjiagang traders 4,780, up 70; Guangzhou traders 4,680, up 70; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil drops in price today, of which it settles down 30-50 yuan at 7140-7320 yuan/tonne in coastal areas. (Fujian not offered; Guangdong not offered; and Guangxi 7350, down 50). The hearing on evidence disclosure against Meng Wanzhou has completed without any progress, which will stand between China and Canada. Domestic rapeseed oil market stays strong due to the falling inventory of rapeseed oil and rapeseed in the coastal regions. But further price rises will be capped by upcoming harvests and sales of new soybeans in the U.S.. Buyers are suggested to replenish on the dips for appropriate stocks, but not to drive up prices excessively. 

Cottonseed oil: Cottonseed oil today declines by 50-350 yuan/tonne from National Day. The environmental warning has lifted. And oil mills raise the operation rate due to the large marketing of Xinjiang cottonseed, so cottonseed oil supply is increasing. Besides, there is a off-season period for oils after National Day and the consumption for cottonseed oil as blending oil is not a lot. Therefore, cottonseed oil price is depressed by all these factors above. However, U.S. soybeans prices continue to rise during the National Day. Oils on DCE today catch up after trading resumed, and spot soybean oil is up 20-60 yuan/tonne and palm oil is up 10-70 yuan/tonne from National Day, which are positive to cottonseed oil market. Therefore, the declines of cottonseed oil prices may be limited. On the other hand, short-term cottonseed oil is likely to fall back continuously with the increasing operation rate, so buyers are suggested to stay on the sideline or buy on immediate demand. Additionally, China and U.S. will resume the high-level trade negotiations from Oct. 10 to 11 in Washington, and people can keep a close eye on the new development.

(USD $1=CNY 7.07)