Today (Feb. 7), 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, which supports cottonseed market. However, oils decline after Spring Festival and the demand for 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 futures continued to close higher last night on technical buying and improved exports. China-Japan Friendship Hospital pointed out last night that the result of the clinical test of remdesivir had yet been concluded, and there was still not a turning point for new suspected cases of the coronavirus,; hence, the stock market post losses today. Oil futures also decline on the Dalian Commodity Exchange. In the spot markets, soybean oil steadily drops by 40 yuan/tonne and palm oil down 40-60 yuan/tonne, and the trading is weak under cautious sentiment. The majority of oil mills have not resumed work under the epidemic and local governments in many regions have taken strict control, so soybean crush is likely to go lower than expected. Soybean oil stocks in China have decreased to a low level of 840,000 tonnes as of January 31st. Moreover, the cost of logistics has also been lifted, and the demand for instant noodles have added to the use of palm oil. All these factors continue to support the oil market, helping limit the decline in price. But oil mills have purchased at least 1 million tonnes of Brazilian soybeans this week due to good crush margins, and the government is also implementing policies to push grain and oil enterprises to resume production. In a hybrid of the bear and the bull, the oil market is predicted to follow futures to fluctuate frequently in the short term. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6420-6720 yuan/tonne in domestic coastal areas, a partial decline of 40 yuan/tonne. (Tianjin traders 6420-6440; Rizhao traders 6600; Zhangjiagang traders 6720; and Guangzhou traders 6650-6670). 

Palm oil: RBD palm olein is mainly priced at 6130-6210 yuan/tonne in coastal areas, a partial decline of 40-60 yuan/tonne. (Tianjin traders 6200-6210, down 40; Rizhao traders yet offered; Zhangjiagang traders 6200, flat; Guangzhou traders 6130-6150, down 60; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil goes up in price, of which it settles up 50-70 yuan/tonne at 8030-8180 yuan/tonne. (Fujian 8170; Guangdong and Guangxi not offered) Mills have low rapeseed stocks, as there is no sign of a thaw in relations between China and Canada. And rapeseed oil stocks are also small, with nearby contracts almost all sold out. Mills are stalling sales, which props up rapeseed oil market. But importers are scooping up on soybeans due to good crush margins on the DCE, with at least 1 million tonnes purchased from Brazil this week. Besides, the demand for oils is traditionally slack after the Lunar New Year, and the catering services are hit heavily by the epidemic this year; hence the demand for oils will go sharply lower than in previous years. In addition, the government is also implementing policies to push grain and oil enterprises to resume production, so the supply in oil market will again increase in later period. It is predicted that the rapeseed oil market will not go up in a straight line and will fluctuate at the high level, so buyers are suggested not to chase after excessively high prices.  

Cottonseed oil: Cottonseed oil is still not offered today. As only few Xinjiang oil mills start the production on account of the novel coronavirus pneumonia outbreak, the supply of cottonseed oil is very limited at the moment, so cottonseed oil market is supported by a shortage of supply. 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. Furthermore, stock market and oils stop rising and start declining today. On the spot market, soybean oil and palm oil down by 40-60 yuan/tonne. Accordingly, cottonseed oil market is curbed by these factors. With crush enterprises resuming the operation successively in the late period, cottonseed oil price is likely to go down.