Today (Feb. 5), the market for oilseeds and oils in China is shown as follows:

 

Cottonseed: Today, the cottonseed is not purchased and quoted, and only few cottonseed oil mills are operating so as to run down stocks. And the supply of cottonseed is limited on the market. However, oils fell sharply after the Lunar New Year affected by panic mood amid the new coronavirus pneumonia epidemic, so the demand for meals would be not improved soon. Therefore, cottonseed market is weighed down, and the price may drop after trading resuming.

Summary: US soybean futures extended gains last night following a huge rise in the stock market and as soybean harvests might be delayed by rains in parts of Brazil. Oil futures fluctuate to move higher on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil post a rise of 50-80 yuan/tonne, and there are just some low-level purchases. Most mills have to delay the schedule for production under the novel coronavirus spreading across the country. Soybean oil stocks stay at a low level of 850,000 tonnes in domestic mills, which is little changed from that before the festival. Besides, the blockade for cities and roads is now a common outcome under the epidemic situation, so that the cost for transportation has been lifted by sluggish logistics. Meanwhile, a sharp rise in demand for instant noodles will also help increase palm oil usage. All these factors will thus help boost the oil market to rebound after a round of losses. However, the tourism and catering industry has losing ground under the influence of the epidemic, and all schools and colleges have also delayed the opening; hence, the demand for medium-sized packing oils has declined largely, and the overall demand for oils have also went sharply lower than that in the corresponding period in past few years. In addition, Feb-Apr gross crush margins for Brazilian soybeans touch 260-270 yuan/tonne, so that Chinese importers bought nearly 8 cargoes of Brazilian soybeans in the last two days. It is reported that there are 7 million tonnes of soybeans lining up at Brazilian ports, most of which will be heading for China. Before an effective control of the epidemic, the overall oil market will likely take a weakening trend, and the rises at present are predicted to be limited and may be accompanied by frequent fluctuations. Only when participants turn to focus on the fundamentals will there be a hope for an uptrend in the oil market.

Soybean oil: GB Grade I soybean oil is mainly priced at 6450-6660 yuan/tonne in domestic coastal areas, a rise of 80 yuan/tonne. (Tianjin traders Y2005+300~310, or 6450-6460; Rizhao traders 6530; Zhangjiagang traders Y2005+510, or 6660; and Guangzhou traders Y2005+510, or 6630). 

Palm oil: RBD palm olein is mainly priced at 6060-6130 yuan/tonne in coastal areas, a rise of 60-100 yuan/tonne. (Tianjin traders 6110-6130, up 60; Rizhao traders yet offered; Zhangjiagang traders 6100, up 100; Guangzhou traders 6060-6080, up 80; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil goes up in price, of which it settles up 50-80 yuan/tonne at 7820-7920 yuan/tonne. (Fujian 7870; Guangdong and Guangxi not offered) There is no sign of a thaw in relations between China and Canada, so that rapeseed and rapeseed oil stocks are low in domestic mills. Although the epidemic has exerted an impact on the catering industry, the demand for small-sized packing rapeseed oil bucks the situation to see an increase. Therefore, rapeseed oil market is predicted to keep strengthening in the near term. But the demand for oils is normally slack after the Spring Festival, especially now with the spread of the coronavirus. Because of the virus, the catering industry is crippling, and schools and enterprises have also postponed the schedule of opening. Therefore, rapeseed oil prices will have little upward potential and may fall before an effective control of the epidemic, and buyers are suggested not to chase after excessively high prices. 

Cottonseed oil: Cottonseed oil is unquoted today, and most enterprises have yet to resume the operation. As only few enterprises start the production on account of the novel coronavirus pneumonia outbreak, the supply of cottonseed oil is very limited at the moment. Moreover, oils on DCE move higher with fluctuations today, and soybean oil and palm oil up by 50-80 yuan/tonne on the spot market. But the downstream demand for cottonseed oil as blending oil is limited. And staple oils still drop significantly compared to before holiday. Thus, cottonseed oil market may be dragged down. With crush enterprises resuming the operation successively in the late period, cottonseed oil price is likely to go down.