Today (Feb. 18), the market for oilseeds and oils in China is shown as follows:

 

 

Cottonseed: Xinjiang cottonseed is flat today and delivered to pastures. But Xinjiang cottonseed can’t be transported to inland due to logistics constraints and inland ginneries have not returned to work yet. And oil mills have a difficult in purchasing cottonseed due to the road closures in villages and towns so that they mainly use their stocks. 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 meals climb up but the demand outlook is still worrisome. Therefore, the price may drop moderately after trading resuming.

 

 

Summary: US soybean futures market was closed for the President’s Day yesterday. And on the Dalian Commodity Exchange today, oil futures moderately rose in early trading and then fluctuate to decline. In the spot markets, soybean oil posts a partial decline of 20-70 yuan/tonne and palm oil down by 30-100 yuan/tonne. Domestic oil mills are buying up on soybeans from Brazil and US PNW due to good crush margins, and soybean meal is also in active trading, so they will further pick up soybean crush to nearly 1.80 mln tonnes in both coming two weeks. On the other side, the demand for soybean oil has been weak after the Lunar New Year holidays, soybean oil stocks thus rose by 15% to 1.03 mln tonnes in the week ending Feb 14th and several mills have already faced with swelling stocks. In the meantime, palm oil stocks have also moved to above 940,000 tonnes. And the situation of palm oil exports is also not satisfactory in Malaysia. Therefore, the oil market is under  growing supply pressure, and the technical rebound in the market yesterday and earlier today is just a flash in the pan. Overall, the market will probably continue to fluctuate with a weak trend until the novel coronavirus pneumonia is under the control. Buyers can stay on the sidelines for the moment.

 

Soybean oil: GB Grade I soybean oil is mainly priced at 6130-6450 yuan/tonne in domestic coastal areas, partially down by 20-70 yuan/tonne. (Tianjin traders 6130-6140; Rizhao traders 6200; Zhangjiagang traders 6450; and Guangzhou traders 6170-6190). 

 

Palm oil: RBD palm olein is mainly priced at 5720-5930 yuan/tonne in coastal areas, down by 30-100 yuan/tonne. (Tianjin traders 5820-5830, down 60; Rizhao traders 5920-5930, down 30; Zhangjiagang traders 5820, down 80; Guangzhou traders 5720-5740, down 100; and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil rises in price, of which it settles up 20-30 yuan at 8230-8330 yuan/tonne. (Fujian 8230; Guangdong and Guangxi not offered) Rapeseed supply has been in tension subject to a stalemate between China and Canada, so its crush has stayed at a low level, and rapeseed oil stocks also remain low. These factors help support the market now. Nevertheless, the demand from the catering industry has sharply cut by the epidemic, so that soybean oil stocks has arisen by 15% weekly to 1.03 mln tonnes. With a weak trend in soybean oil and palm oil markets, rapeseed oil prices are also unable to buck the trend and may fluctuate at high levels. Buyers can wait for the moment. 

 

Cottonseed oil: Cottonseed oil is mostly unquoted and partially stable today. The data show that the pneumonia epidemic had caused 78% of catering businesses to lose over 100% of revenues, and oils trading remained depressed after holiday. Also, the demand for cottonseed oil is very limited, seeing a tepid trading on the market. Besides, oils on Dalian Commodity Exchange fluctuate to fall today, with a decrease of 30-100 yuan/tonne in the spot market of soybean oil and palm oil. Consequently, cottonseed oil price is depressed. But the operation rate in oil plants is very low at the moment, which leads cottonseed oil to be resilient temporarily. With crush enterprises resuming the operation successively in the late period, cottonseed oil price may be at high risk in dropping. Buyers can take a wait-and-see attitude.