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Daily Review on Markets for Oilseeds and Oils in China--31/10/2019

2019-10-31 www.cofeed.com
Today (Oct. 31), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

Imported soybean: Imported soybeans are priced steadily today, among which Canada soybean with 41% protein is unchanged at 3,980 yuan/tonne, and Ukraine soybean at 3,400 yuan/tonne. Chinese soybeans are in liberal supply at present. Although Chilean government announced to cancel the APEC summit in November, a spokesperson with China’s Ministry of Commerce said that Chinese and U.S. economic and trade teams have maintained close contact and are making smooth progress on the negotiations. The spokesperson also said that the two sides will continue to advance consultations as planned, and the Chinese and U.S. chief trade negotiators will hold a phone conversation again on Friday. China is likely to purchase more US soybeans, which is bearish to domestic markets. Overall, short-term market for imported soybeans will likely stay stable in the short term. 

Cottonseed: Cottonseed prices stay stable with some rises of 0.01-0.02 yuan/kg. Ginneries in North Xinjiang are still reluctant to sale cottonseeds, and South Xinjiang cottonseeds have not gone marketing in huge quantities yet. Moreover, there is an increase of purchase quantity in oil mills as well. In consequence, cottonseed market is supported by these factors. However, the rises of cottonseed are also limited by increasing supply of Xinjiang cottonseed in the late period. Therefore, overall cottonseed price is predicted to rebound with fluctuations. To maintain safety inventory, buyers can make replenishment on the dips.

Oils: 

Summary: Chilean government announced to cancel the APEC summit in November, and the market had expected leaders from China and the US would sign the “phase one” trade deal at the summit, so US soybean futures edged lower last night. But a spokesperson with China’s Ministry of Commerce said that Chinese and U.S. economic and trade teams are making smooth progress on the negotiations, and chief trade negotiators from both sides will hold a phone conversation again on Friday. On the Dalian Commodity Exchange today, soybean oil reverses to edge lower, and palm oil also slows down its upward pace. In the spot market, soybean oil largely goes steady, and palm oil increases by 10-20 yuan/tonne. The trading today may be less than that of yesterday as DCE futures are adjusting fractionally. DCE crush margins for imported soybeans still stay at 230-270 yuan/tonne, and Argentine crude soybean oil also posts some margins from time to time, which both keep the upward space of oils in check. But soybean oil stocks may fall as some mills have to suspend production due to soybean shortages. And buyers will stock up for the New Year’s Day and the Spring Festival this year earlier than usual, so mills are taking their time in delivery. Besides, the USDA has sharply trimmed its estimates for stocks of US soybeans. And the inflation expectation caused by surging pig prices will force up the bottom of futures of agricultural product. Therefore, the oil market is predicted to continue its strengthening trend, but participants need to prevent fluctuation risks in the upward trend due to range-bound and choppy trading on the DCE.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,460-6,540 yuan/tonne in domestic coastal areas, a partial and further rise of 20-30 yuan/tonne. (Tianjin traders 6,460-6,470, Rizhao traders 6,520, Zhangjiagang traders 6,540, and Guangzhou traders 6,520-6,550). 

Palm oil: RBD palm olein is mainly priced at 5,190-5,380 yuan/tonne in coastal areas, mostly up 10-20 yuan/tonne. (Tianjin traders5,370-5,380, up 10; Rizhaotraders5,360, up 20; Zhangjiagang traders 5,280, flat; Guangzhou traders 5,190, up 10; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 20-30 yuan at 7,520-7,670 yuan/tonne in coastal areas. (Fujian 7,580, up 30; Guangdong yet offered; and Guangxi 7,650, stable). China’s rapeseed market has tight supplies now due to its rocky relations with Canada. And its rapeseed oil stocks also remain at a low level, so mills now are stalling on the sales, which supports the prices to maintain the strengthening trend. But the demand for rapeseed oil is still subdued by its big price gap with soybean oil. And mills continue scooping up on soybeans due to handsome crush margins, which helps keep the crush at a high level, so the oil market will be in adequate supply. A spokesperson with China’s Ministry of Commerce said that Chinese and U.S. economic and trade teams are making smooth progress on the negotiations and chief trade negotiators from both sides will hold a phone conversation again on Friday. Rapeseed oil market is still confronted with some negative factors, but will probably maintain its strengthening trend at the high level. Buyers are suggested not to chase after excessively high prices. 

Cottonseed oil: Cottonseed oil price stays stable with some rises of 100-300 yuan/tonne today.
The cottonseed oil market is supported by good delivery situation and no cottonseed oil inventory. But according to the Ministry of Commerce (MOC), China and U.S. are in smooth progress of negotiations and will make a phone call again this Friday. Soybean oils on DCE today edge down, which is bearish to cottonseed oil market. USDA slashed the inventory of U.S. Soybeans, and the bottom of agricultural futures was raised by inflation expectations due to a surge in pig prices. Therefore, oils market outlook is bullish, and cottonseed oil prices may keep trending up with fluctuations. Buyers can maintain safety inventory on the dips but not chase up prices too high.

(USD $1=CNY 7.05)