Today (Feb. 6), the market for oilseeds and oils in China is shown as follows:

 

 

Cottonseed: Today, the cottonseed is unquoted, and most oil mills have yet to start the production, while only few are operating to run down stocks. And factories halt purchasing cottonseed due to the control of road traffic and population movements. Also, the supply of cottonseed is limited on the market. However, the demand for oils and meals would be not improved soon, for which is affected by panic mood amid the new coronavirus pneumonia epidemic. Therefore, cottonseed market is weighed down, and the price may drop moderately after trading resuming. 

 

 

Summary: US soybean rose for a third consecutive session last night, as huge rises in global stock markets and in soybean oil futures offset the concerns over its exports. In addition, the market is expecting a sharp decline in Malaysian palm oil production in January. Therefore, oil futures continue its broad gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil increases by 40-80 yuan/tonne and palm oil rises by 110-130 yuan/tonne, with some low-level purchases. The novel coronavirus, which is still spreading, have resulted in downtime in mills and have lifted the cost for transportation. Meanwhile, the demand for instant noodles during the epidemic situation has also increased the use of palm oil. Moreover, according to MPOA, Malaysian palm oil output is forecast to see a 15.5% decline in January, and its stockpiles are thus likely to fall a low level of around 1.70 mln tonnes. Besides, soybean oil stocks in China have also dropped to 840,000 tonnes by the end of January. Therefore, oil market is in tight supply now, which helps drive the market to go further upward. But the tourism is losing ground under the epidemic situation, and all schools and colleges have also delayed the opening, so the use of middle-sized packing oils. In addition, domestic mills are scooping up on soybeans in Brazil due to its good crush margins. And the government is taking measures to help grain and oil enterprises to resume production. Buyers now are cautious, which will affect the trading in the market.

 

Soybean oil: GB Grade I soybean oil is mainly priced at 6510-6750 yuan/tonne in domestic coastal areas, a rise of 40-80 yuan/tonne. (Tianjin traders Y2005+260-280, or 6510-6530; Rizhao traders 6620; Zhangjiagang traders 6720; and Guangzhou traders Y2005+480~500, or 6730-6750). 

 

Palm oil: RBD palm olein is mainly priced at 6180-6250 yuan/tonne in coastal areas, a rise of 110-130 yuan/tonne. (Tianjin traders 6230-6250, up 110; Rizhao traders yet offered; Zhangjiagang traders 6200, up 130; Guangzhou traders 6180-6210, up 110; and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil goes up in price, of which it settles up 180-200 yuan/tonne at 8010-8110 yuan/tonne. (Fujian 8090; Guangdong and Guangxi not offered) Due to a stalemate between China and Canada, rapeseed is in tight supply and its crush remains at a low level. And rapeseed oil stocks also stay low. Mills in Guangdong and Guangxi have low stocks in hand and are mainly carrying out contracts, with very small volume available for spot contracts. Therefore, rapeseed oil, which has been in tight supply, manages to soar in price, and the short-term market is predicted to keep is strengthening trend. But the demand from the catering industry will be low before an effective control of the epidemic, so rapeseed oil prices will have little impetus for consecutive rises. Buyers are suggested not to drive up prices excessively. 

 

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. Besides, since Malaysian palm oil production in January is expected to sharply decline, oils on Dalian Commodity Exchange today continue to rise broadly. On the spot market, soybean oil increases by 40-80 yuan/tonne and palm oil up by 110-130 yuan/tonne. Therefore, cottonseed oil market is supported by these factors. However, as a result of the pneumonia outbreak, tourism has been hard hit and universities have delayed the opening. Except that, the amount of packaging also slumps, and downstream demand for cottonseed oil as blending oil is very limited. Consequently, cottonseed oil market is also curbed. Buyers had better to focus on the change of staple oils, which may not maintain a continuous sharp rise until epidemic is over.