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Daily Review on Markets for Oilseeds and Oils in China--29/11/2019

Today (Nov. 29), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:

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. In the meantime, US soybean imports later may get impeded by the uncertain trade relationship between China and the United States, which is bullish to domestic distribution markets. Overall, the market for imported soybeans will probably keep firm in the short term. 

Cottonseed: Cottonseed price stays stable with several rises of 0.02 yuan/tonne today. The cottonseed production is lower than the previous year, so there are not many spot goods available for sale and the supply is tight. Thus, cottonseed market is supported. However, oil mills purchase cottonseed prudently due to little shipping quantity of cottonseed oil and cottonseed meal, some mills even halt the purchase. In consequence, cottonseed market is dragged down. It is expected that short-term cottonseed may fluctuate at a narrow range but not change the overall upward trend. Buyers can make small replenishment on the dips and remain cautious in chasing up prices.

Oils: 

Summary: Palm oil futures on BMD closed higher over 1% yesterday due to a tight supply outlook and on about Indonesian biodiesel plans. Oil futures all rise on the Dalian Commodity Exchange today. In the spot markets, soybean oil mostly increases by 10-50 yuan/tonne with some declines of 20 yuan/tonne, and palm oil mostly increases by 20-80 yuan/tonne. The trading is expected to be tepid only with some purchases at low levels. Palm oil is in the period of reduced production in major production countries. An official from Indonesia’s energy ministry said that its government will work on B50 research after officially launching the B30 programme in January, and this has become the fresh hype of the longs. Besides, soybean oil stocks keep decreasing. Mills choose to prop up prices now as oil supply will continue to tighten in coming months. The market will see more fluctuations intensified by handsome crush margins, which has sent soybean arrivals at ports to reach 9.28 mln tonnes in December. But with support from bullish fundamentals, the overall market still stays at a strengthening pattern. Buyers are suggested not to chase after excessively high prices, but to make appropriate replenishment on the dips. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,440-6,580 yuan/tonne in domestic coastal areas, mostly up 10-50 but some down 20 yuan/tonne. (Tianjin traders 6,440-6,450, Rizhao traders 6,550, Zhangjiagang traders 6,530, and Guangzhou mills 6,580 and traders 6,440). 

Palm oil: RBD palm olein is mainly priced at 5,530-5,670 yuan/tonne in coastal areas, mostly up 20-100 yuan/tonne.(Tianjin traders5,620-5,630, up 70; Rizhao traders 5,650-5,670, up 20;Zhangjiagang traders 5,580, up 80;Guangzhou traders 5,530, up 100 for December shipment; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil edges up in price today, of which it settles up 20-30 yuan at 7,720-7,900 yuan/tonne in coastal areas. (Fujian 7,720; Guangdong yet offered; and Guangxi 7,900.) Mills are expected to lower down rapeseed crush further due to tight supplier which can be mainly attributed to rocky relations between China and Canada. Moreover, soybean oil and rapeseed oil stocks have been declining for a 6th week in row. And buyers are still stocking up for the holidays when mills still have a lot of outstanding contracts signed previously in hand, so stocks will continue to reduce later. Good fundamentals will continue to strengthen rapeseed oil market by bolstering mills to prop up prices, but it may come with frequent fluctuations in the wake of futures. 

Cottonseed oil: Cottonseed oil stays stable today. Factories have low stock of cottonseed oil, and cottonseed prices are high. Besides, oils on DCE today go up, and spot soybean oil mostly up by 10-50 yuan/tonne. Therefore, cottonseed oil market is dragged down by these factors. It is expected that short-term cottonseed oil may be relatively stable. Additionally, the fundamentals of bulk oils still bull the market, and the rises of futures in the afternoon are likely to enlarge, so the outlook is also optimistic relatively. Buyers can make replenishment in small batches upon low prices.

(USD $1=CNY7.03)