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Daily Review on Markets for Oilseeds and Oils in China--21/1/2020

2020-01-21 www.cofeed.com
Today (Jan. 21), 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 4,260 yuan/tonne and Canadian soybean at 4,180 yuan/tonne. Port traders now do not have much supply in hand. And market participants are staying on the sidelines due to China's pledge to buy U.S. farm goods based on "market conditions" during the Phase 1 trade deal signing ceremony on Wednesday. Moreover, the market now is quiet as traders are getting off the market for the Spring Festival. Overall, the market for imported soybeans will probably be little changed ahead of the Spring Festival. 

Cottonseed: Today, cottonseed is stopped to be purchased and quoted, while a minority of cottonseed oil mills continue the operation to run down inventories. Cottonseed supply is limited under the impact of very low operation rate, for which the cottonseed market is bolstered. However, most oil mills halt the operation with Spring Festival approaching, resulting in almost no transaction. Thus, the cottonseed market is weighed down. Moreover, both purchasing and selling are tepid with the forthcoming Spring Festival and thick festive air. It is predicted that cottonseed price will mainly keep steady before holiday, so buyers can take a wait-and-see attitude.

Oils: 

Summary: US stock market was shut yesterday. The oil futures rebounded moderately yesterday as soybean oil stocks fell 3% to 850,000 tonnes last week. But it is confirmed that the novel coronavirus pneumonia in Wuhan can spread from person to person, coupled by a quick increase in new cases in several cities. This has triggered market concerns that it will influence the catering industry and thus reduces the demand for edible oils, so the stock markets broadly fall today, and oil futures also tumble on the Dalian Commodity as funds trim positions en basse. But spot oil markets are quiet now as most distributors have been on the way for Chinese Lunar New Year, and some traders who quote today have cut the prices by 100-140 yuan/tonne. Soybean imports will be substantial under trade deal between China and the United States, and mills now maintain soybean crush high at 2 million tonnes due to good margins, which continue to weigh down the oil market. Short-term oil market will follow futures to decline and buyers can wait at the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6900-7150 yuan/tonne in domestic coastal areas. (Tianjin traders not offered; Rizhao traders not offered; Zhangjiagang traders 7000, down 100, and Guangzhou traders 6960). 

Palm oil: RBD palm olein is not offered in most markets. (Zhangjiagang traders 6300, down 100; and Guangzhou traders 6290, down 140). 

Imported rapeseed oil: US soybean futures prices were unavailable as the board was shut yesterday. It is confirmed that the novel coronavirus pneumonia in Wuhan can spread from person to person. This has triggered concerns in the market and sent the stock market and oil futures to fall across the board, and thus influencing the spot prices. But few quotes are available in the rapeseed oil market, as most distributors have been on the way home for the Chinese Lunar New Year. The prices offered posts a partial decline of 20 yuan/tonne today. Soybean imports will balloon under the trade deal between China and the United States, and mills are pegging operation rates for soybean crush at high levels due to good margins. Meanwhile, buyers have basically completed replenishment ahead of the festival. Rapeseed oil prices are thus curbed. But mills now are short of rapeseed as there is no sign of a thaw between China and Canada. Rapeseed oil stocks are small under low operation rates. Rapeseed oil prices are predicted to fluctuate to adjust at high levels before the festival, and buyers can wait at the moment.

Cottonseed oil: Today, cottonseed oil prices partially stay stable and are stopped to quote for the most part. The purchasing price of cottonseed is high in earlier stage and only a minority of enterprises continue the operation amid stronger festive air, so the cottonseed oil market is supported. But the downstream demand for cottonseed oil as blending oil is limited. Besides, China has confirmed that a new coronavirus in Wuhan which causes pneumonia could spread through human contact. And the number of cases increases rapidly in many cities in recent days, sending jitters through markets. For this reason, the catering industry will be affected, thereby reducing demand for cooking oil. Moreover, stock market falls on the news today, and investors withdraw money to reduce position. Also, oils on Dalian Commodity Exchange plunge today. But most dealers are returning to their hometown for holiday as Spring Festival is around the corner, so there are not many quotes available in the market. Soybean oil and palm oil are offered just in several regions, with a decline of 100-140 yuan/tonne. Therefore, cottonseed oil market may be weighed down by these factors, so buyers can take a wait-and-see attitude.

(USD $1=CNY 6.86)