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Daily Review on Markets for Oilseeds and Oils in China--15/11/2019

Today (Nov. 15), the market for oilseeds and oils in China is shown as follows:

Imported soybean: Imported soybeans steady today, among which Kazakhstan soybean  is unchanged at 4,180 yuan/tonne, and Ukraine soybean at 3,500 yuan/tonne. Imported soybean supply to distribution markets remains scanty at ports, and traders are in fair shipments. A report said that trade talks between the U.S. and China have hit a snag over farm purchases, and China’s Ministry of Commerce said that the removal of tariffs is of significance for both sides to reach a deal. Due to the uncertainty relations, China may just import US soybeans at a small amount later, which will support its domestic market. Short-term market for imported soybeans will probably keep firm in the short term. 

Cottonseed: Cottonseed prices stay stable with some rises of 0.01-0.02 yuan/kg. The cottonseed products have decreased than last year, and spot goods are tight due to the contract implementation. Thus, the cottonseed market is supported. But the cottonseed market is also dragged down as the market sentiment for trading is not good; the bulk oils pare gains. Therefore, it is predicted that the overall cottonseed will still keep an upward trend with fluctuations. Buyers can make proper replenishment on the dips.


Summary: US Private exporters reported export sales of 129,000 tonnes of soybeans for delivery to China, which made US soybean futures edge higher last night. Oil futures fluctuate to lower after rebounding in early trading and close lower at noon on the Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil decline 30-80 yuan/tonne. The trading is tepid for spot contracts and better upon forward basis. DCE margins for soybean crush stay at 220-230 yuan/tonne at present, for which domestic importers bought from Brazil at least 14 boatloads yesterday for December and January shipments. This continues to weigh down the oil market. Due to tight supplies among some mills, soybean crush remains at a relatively low level. Soybean oil stocks dropped 6% to 1.18 mln tonnes as of November 8th and may fall further below 1 mln tonnes by the end of this year. The market is bullish about forward basis, making soybean oil trade well from time to time, and mills now have a backlog of contracts to be fulfilled. Besides, China’s Ministry of Commerce said that the removal of tariffs is of significance for China and the United States to reach a deal. The market is still bullish about the oil market. The short-term trend is predicted to move upward after fluctuations, and buyers can wait for low and stable prices to make appropriate replenishment. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,500-6,700 yuan/tonne in domestic coastal areas, a decline of 40-80yuan/tonne. (Tianjin traders 6,500-6,510, Rizhao traders 6,630, Zhangjiagang traders 6,570, and Guangzhou mills 6,700 and traders 6,500). 

Palm oil: RBD palm olein is mainly priced at 5,390-5,540 yuan/tonne in coastal areas, down 30-80 yuan/tonne. (Tianjin traders5,520-5,530, down 50; Rizhao traders 5,540, down 30; Zhangjiagang traders 5,460, down 80; Guangzhou traders 5,390, down 50; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil edges higher in price today, of which it settles up 10-20 yuan at 7,560-7,770 yuan/tonne in coastal areas. (Fujian 7,560, up 10; Guangdong yet offered; and Guangxi 7,770). Subject to rocky relations between China and Canada, there is a lack of rapeseed among domestic mills. Rapeseed oil has been in tight supply, and the peak consumption season is coming. Mills now are just carrying out contracts. Rapeseed and rapeseed oil stocks have been falling for a fourth week, and rapeseed oil stocks are expected to fall further. The overall rapeseed oil market is bullish, but may fluctuate in the wake of futures in the short term. Buyers are suggested not to go after excessively high prices. 

Cottonseed oil: Cottonseed oil price stays stable with some declines of 50-100 yuan/tonne today. The cottonseed oil market is weighed down by light trading of new orders due to less inquiry in some factories. Furthermore, oils on DCE fluctuated to move lower after a rebound in early trade and ended down in afternoon trading. Spot soybean oil and palm oil declined by 30-80 yuan/tonne. But factories have a strong will to raise price due to no cottonseed oil stock and high price of cottonseed. Additionally, the peak season for stocking up packing oil before the New Year’s Day has begun, so cottonseed oil market outlook is expected to maintain an upward trend with fluctuations. But short-term market may follow bulk oils to fluctuate to adjust, and buyers can wait and see.

(USD $1=CNY 7.01)