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Daily Review on Markets for Oilseeds and Oils in China--21/10/2019

2019-10-21 www.cofeed.com
Today (Oct. 21), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

Imported soybean: Imported soybean price drops today, among which Canada soybean with 41% protein is lower 80 yuan/tonne from last Friday at 4020 yuan/tonne, Myanmar soybean is out of stock and not quoted, and Ukraine soybean is unchanged from last Friday at 3470 yuan/tonne. Imported soybeans are bearish when the supply increases greatly on ample supply of China soybean, and more US soybean will be imported amid the ease of US-China trade relationship. The quotations from port traders move side ways with weak trend for lack of confidence. Short-term imported soybeans for distribution are likely to be steady with weak momentum.

Cottonseed: Cottonseed prices fluctuate in a range of 0.02-0.10 yuan/kg today. Oil mills start planning to stockpile cottonseed, and the trading volume increases, which may support cottonseed market. Besides, the price of Xinjiang cottonseed delivered to inland oil plants increases due to a slight rise of freight from Xinjiang to inland. But the increasing supply of cottonseed also limits price upward space. On the other hand, staple oils and mills price goes up generally, which may limit the declines. And it still rises weakly, so short-term price probably stays stable with adjustment at a narrow range. Buyers can make proper replenishment on the dips.

Oils: 

Summary: US soybeans further rose last Friday on sustaining snowy weather and the purchases of 850,000 tonnes by China last week. On the Dalian Commodity Exchange today, oil futures tick higher in early trading, but turn choppy to move lower because arbitragers are seeking profits in higher import margins of Argentine crude soybean oil, with soybean oil dropping during the trading, and the futures see only small gains in afternoon trading. In the spot markets, soybean oil and palm oil increase by 20-60 yuan/tonne to attract some low-level purchases, and the overall trading remains tepid. Mills are making delivery smoothly with stronger-than-expected soybean oil trading after the holiday, so the stocks has declined by 1% weekly to 1.34 mln tonnes at present. With a backlog of November and December contracts in hand, mills are active in lifting prices. But US farmers are quickening their soybean harvests. Meanwhile, Chinese importers have purchased substantial soybeans with the monthly average over 8.0 mln tonnes in November and December, so mills have begun to pick up their soybean crush since last week. And gross margins for soybeans from South America and US PNW have rallied to 200-250 yuan/tonne, and oil market may also move ups and downs due to the arbitrage for higher import margins in Argentine soybean oil. Buyers are suggested not to drive up prices excessively.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,100-6,210 yuan/tonne in domestic coastal areas, up 20-50 yuan/tonne. (Tianjin traders 6,100-6,110, Rizhao traders 6,130, Zhangjiagang traders 6,210, and Guangzhou traders 6,160). 

Palm oil: RBD palm olein is mainly priced at 4,790-4,960 yuan/tonne in coastal areas, up 30-60 yuan/tonne. (Tianjin traders 4,890-4,900, up 30; Rizhao traders 4,960, up 30; Zhangjiagang traders 4,920, up 60; Guangzhou traders 4,790, up 30; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 10-20 yuan/tonne at 7,310-7,400 yuan/tonne in coastal areas. (Fujian yet offered; Guangdong yet offered; and Guangxi 7,400). China face tight supply situation in its rapeseed market, as its pending issues with Canada has impeded imports of rapeseed and rapeseed oil. Domestic rapeseed oil stocks dropped by 1.9% last week to 463,000 tonnes, which supports the market to stay strong. But the demand is subdued in the market as rapeseed oil has a big price gap with soybean oil. Both rapeseed crush and soybean crush are expected to pick up in the next two weeks, and palm oil imports are also huge, so domestic oils will be in growing supply. This will a curb on the price rises in rapeseed oil market. Overall, the market is predicted to fluctuate frequently at the high level, and buyers can buy on immediate demand. 

Cottonseed oil: Cottonseed oil prices stay stable with a rise of 50-100 yuan/tonne. Spot soybean oil and palm oil rise by 20-60 yuan/tonne, and trading situation after National Day is better than expected. So the cottonseed oil market is buoyed. However, the rises are limited by climbing operation rate and little consumption of cottonseed oil as blending oil. And staple oils rise up, which may buoy short-term cottonseed oil price to stop declining and start rebounding modestly. Buyers can make proper replenishment on the dips and not chase up prices too high.

(USD $1=CNY 7.07)