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

2019-10-10 www.cofeed.com
Today (Oct. 10), 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 41% protein is unchanged from yesterday at 4350 yuan/tonne, and Myanmar soybean is unchanged from yesterday at 4450 yuan/tonne. With the marketing of China new soybean, the ample supply and low confidence of higher offers by port traders are bearish for China's market. According to Bloomberg, Chinese negotiators suggest the US soybean purchase increases from the present 20 million tonnes to 30 million, and are reportedly open to negotiating a partial trade deal with the U.S. If the progress of trade talks goes well, more US soybeans will be imported. Imported soybeans likely maintain stable with weak momentum.

Cottonseed:Cottonseed prices stay stable today. The trading volume of cottonseed increases with the rising operation rate. However, the cottonseed supply increases and the freight from Xinjiang to inland is high. Thus, cottonseed market is dragged down by these factors. The market price is a little bit changeable at present, and short-term cottonseed is predicted to mainly fall back with fluctuations. But the declines may not too much due to good crush margin. Buyers can buy on immediate demand and make proper replenishment on the dips.

Oils

Summary: A foreign media reported that the Chinese trade delegation had offered to boost annual purchases of soybeans to 30 million tonnes compared with 20 million at present, and China was open towards a partial trade deal with the US. US soybean futures thus extended gains last night. On the Dalian Commodity Exchange today, palm oil also continues to move higher in spite of smaller gains, but soybean oil futures fluctuate to adjust after its market traded as high as 100,000 tonnes yesterday at domestic market. In the spot markets, soybean oil partially goes down by 10-30 yuan/tonne and palm oil partially down by 10 yuan/tonne, and the trading is predicted to attract some low-level purchases but not as well as that of yesterday. The upbeat prospect in US-China trade negotiations once again casts a shadow over domestic market. Soybean oil inventory slightly piled up to 1.35 mln tonnes, and palm oil imports remain huge in the next two months. The overall adequate supply is weighing down the oil market. The price loss now is limited as mills have only crushed 1.16 mln tonnes of soybean last week due to the holiday and the environmental protection in Rizhao, a weekly decline of 36%.The overall oil market is predicted to follow futures to post frequent fluctuations in the short run, and participants can wait for the USDA report and this round of trade negotiations.  

Soybean oil: GB Grade I soybean oil is mainly priced at5,940-6,130 yuan/tonne in domestic coastal areas, partially down 10-30 yuan/tonne. (Tianjin traders 5,940-5,950, Rizhao traders 6,000, Zhangjiagang traders 6,130, and Guangzhou traders 6,020-6,030). 

Palm oil: RBD palm olein is mainly priced at 4,730-4,900 yuan/tonne in coastal areas, partially down 10 yuan/tonne. (Tianjin traders 4,830-4,840, flat; Rizhao traders yet offered; Zhangjiagang traders 4,850, flat; Guangzhou traders 4,730-4,740, down 10; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 30-40 yuan at 7,340-7,480 yuan/tonne in coastal areas. (Fujian 7,360, up 40; Guangdong 7,340; and Guangxi 7,480, up 30). Chinese importers remain unwilling to buy rapeseed from Canada amid unsettled issues between the two countries, which leads to a tightening supply of rapeseed and supports rapeseed oil prices in China. But the demand for rapeseed oil has affected by the difference in its price with those of soybean oil and palm oil. Furthermore, domestic oil market has huge supplies now when the demand is going slack. In the meantime, importers have bought substantial palm oil cargoes with shipments in the next two months. The bearish fundamentals may continue to dent spot rapeseed oil market and bring frequent fluctuations. Buyers are suggested not to drive up price too much. 

Cottonseed oil: Cottonseed oil stays stable today. The cottonseed oil prices are depressed by the increasing supply due to a rise of operation rate, an off-season period for oils, as well as the limited consumption for cottonseed oil as blending oils. Additionally, spot soybean oil partially drops by 10-30 yuan/tonne today. On the other hand, short-term cottonseed oil is likely to fall back with fluctuations continuously with the increasing operation rate, so buyers are suggested to stay on the sideline or buy on immediate demand. And buyers can keep a close eye on the new development of negotiation due to the uncertainties of Sino-US trade war.

(USD $1=CNY 7.07)