Today (Feb. 12), the market for oilseeds and oils in China is shown as follows:

 

 

Cottonseed: The cottonseed is not offered today. And a minority of enterprises have applied for returning to job. But it is difficult to get approved, and logistics are blocked, so enterprises have delayed the production and yet to purchase cottonseed. Also, the supply of cottonseed is limited on the market, which supports cottonseed market. However, the demand from catering industry has been hard hit by fears amid the novel coronavirus pneumonia epidemic, which leads cottonseed oil to at risk in dropping. And the demand for meals would be not improved soon. Therefore, the price may drop moderately after trading resuming.

 

Oils: 

 

Summary: US soybean futures continued to edge higher last night, after the USDA in its February Supply and Demand report raised the exports and lowered down the ending stocks of US soybeans. But oil futures extend and expand losses on the Dalian Commodity Exchange today on concerns over the influence caused by the epidemic. In the spot markets, soybean oil declines by 50-60 yuan/tonne and palm oil down by 50-130 yuan/tonne, both in tepid trading. It will take time to totally control the epidemic, as Zhong Nanshan, a senior medical adviser in China, said that the coronavirus outbreak is hitting a peak this month and may be over by April. The spread of the novel conoravirus pneumonia has severely swept the catering industry, so that the oil market has seen a sharp decline in demand. The trading has thus been very weak with an average of only 1,657 tonnes per day since February, which is well below a normal level of 20,000 tonnes. Moreover, Chinese mills are purchasing soybeans from Brazil and US PNW due to good crush margins, and they are rapidly picking up operation rates in these two weeks. In the meantime, despite low crush volume last week, soybean oil stocks still rose by 5.8% to 890,000 tonnes due to subdued demand under the epidemic. It can be seen how dismal the demand is. In addition, BMD palm oil futures also continue to fall on low exports. Overall, the oil market is predicted to continue to fluctuate with slight declines in the short term, and buyers can stay on the sidelines. 

 

Soybean oil: GB Grade I soybean oil is mainly priced at 6220-6550 yuan/tonne in domestic coastal areas, down by 50-60 yuan/tonne. (Tianjin traders 6220-6240; Rizhao traders 6460; Zhangjiagang traders 6550; and Guangzhou traders 6390-6410). 

 

Palm oil: RBD palm olein is mainly priced at 5830-5950 yuan/tonne in coastal areas, down by 50-130 yuan/tonne. (Tianjin traders 5880-5890, down 130; Rizhao traders yet offered; Zhangjiagang traders 5950, down 50; Guangzhou traders 5830-5850, down 130; and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil declines in price, of which it settles down 50-70 yuan/tonne at 8120-8220 yuan/tonne. (Fujian 8120; Guangdong and Guangxi not offered) DCE crush margins for imported soybeans have been quite handsome, which motivates Chinese mills to purchase soybeans from Brazil, so that mills are sparing no effort picking up operation rates this week and next week. In addition, it will take time to totally control the epidemic, as Zhong Nanshan, a senior medical adviser in China, said that the coronavirus outbreak is hitting a peak this month and may be over by April. The number of residents dining out has declined sharply under the spread of the novel coronavirus, so that the catering industry has taken a heavy hammering. The oil market thus falls under pressure. Besides, rapeseed has been in short supply amid a stalemate between China and Canada, so rapeseed oil is also in tight supply under low operation rates. Overall, rapeseed oil spot prices may have smaller declines than futures. And the futures have been weak now, so buyers can wait at the moment. 

 

Cottonseed oil: Cottonseed oil is mostly unquoted today and individual prices are flat. As a result of the pneumonia epidemic, tourism and catering business have been in a huge hurt and universities have delayed the opening. Except that, the amount of packaging also slumps, and demand for cottonseed oil is very limited. Besides, oils on Dalian Commodity Exchange continue falling back today and the declines keep being extended. On the spot market, soybean oil down by 50-60 yuan/tonne and palm oil drops by 50-130 yuan/tonne. Hence, cottonseed oil market is dragged down by all these factors. But most oil mills continue delaying the operation, limiting the supply of cottonseed oil. Accordingly, cottonseed oil market also will be bolstered temporarily. With crush enterprises resuming the operation successively in the late period, cottonseed oil price may be at risk in dropping. Buyers can take a wait-and-see attitude.