Today (Feb. 19), the market for oilseeds and oils in China is shown as follows:

 

Cottonseed: The price of some Xinjiang cottonseed rises by 0.07 yuan/kg today. Pastures are in rigid demand, but there is not much cottonseed circulating in the market, which leads the price of some Xinjiang cottonseed to go up. Due to the short supply, short-term cottonseed market may go strongly under the support. But being affected by the novel coronavirus pneumonia epidemic, it is difficult to transport Xingjiang cottonseed to inland. And oil mills also have trouble in purchasing cottonseed on account of the road closures in villages so that they mainly consume stocks now. Besides, the epidemic has greatly hit catering industry, resulting in a sharp decline in cottonseed oil. Though cottonseed meal price remains high, the demand outlook is worrisome. Moreover, oil plants in Xinjiang cannot resume production, so that some enterprises sell cottonseed in stock. Thus, cottonseed market may still fall back after totally resuming trading.

Summary: US soybean futures dropped last night on abundant harvests in sight in South America and dismal demand in China, and oil futures extend losses on the Dalian Commodity Exchange today. In the spot markets, soybean oil steadily declines by 60 yuan/tonne and palm oil down by 40-100 yuan/tonne. Buyers are staying on the sidelines, subduing the trading. China on Tuesday made an announcement that it would, staring from March 2, accept the application for the exemption of additional tariffs imposed on US products including soybeans. And due to good crush margins, Chinese mills are buying up on soybeans from Brazil and US PNW, and they will further pick up the crush to 1.80 mln tonnes in both next two weeks. However, the demand for soybean oil keeps low, and its stocks have thus increased by 15% weekly to 1.03 mln tonnes, with some mills bothered by swelling stocks. And palm oil stocks have also jumped above 940,000 tonnes in China now. In the meantime, growing output and declining exports in Malaysia are also weighing down the oil market. Overall, the market will keep range-bound with a weakening trend until the epidemic is under the control. Buyers can wait for the moment. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6130-6450 yuan/tonne in domestic coastal areas, a partial decline of 60 yuan/tonne. (Tianjin traders 5980-6000; Rizhao traders 6180; Zhangjiagang traders 6300; and Guangzhou traders 6060-6080). 

Palm oil: RBD palm olein is mainly priced at 5640-5820 yuan/tonne in coastal areas, down by 40-100 yuan/tonne. (Tianjin traders 5760-5780, down 40; Rizhao traders 5820, down 100; Zhangjiagang traders 5800; Guangzhou traders 5640-5680, down 50; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil declines in price, of which it settles down 50-70 yuan at 8160-8340 yuan/tonne. (Fujian 8160; Guangdong and Guangxi not offered) Attracted by good crush margins on the DCE, Chinese mills are buying up on soybeans from Brazil and US PNW, so soybean arrivals at ports will continue to increase and domestic mills will further pick up the crush to nearly 1.80 mln tonnes in both next two weeks. Meanwhile, the demand for oil products has suffered a sharp decline as the epidemic has heavily blown the catering industry and delayed the school opening. With light trading in the market, soybean oil stocks rose by 15% to 1.03 mln tonnes last week, and palm oil inventories also jumped above 940,000 tonnes. Besides, exports in Malaysia are not in a good state at present. Growing pressure in supply has weighed down the market. Nevertheless, rapeseed supply is in shortage amid tensions between China and Canada, and rapeseed oil supply is also tightening under low crush volume, so rapeseed oil is more resilient against other oils. But the market is also unable to buck the trend, and buyers can wait for the moment. 

Cottonseed oil: Cottonseed oil is mostly unquoted today and some prices are down 500 yuan/tonne compared to before holiday. The data show that the pneumonia epidemic had caused 78% of catering businesses to lose over 100% of revenues, and it is hard to finish trading cottonseed oil after holiday. Besides, oils on Dalian Commodity Exchange decline further today, and soybean oil steadily down by 60 yuan/tonne and palm oil down by 40-100 yuan/tonne in the spot market. Consequently, some cottonseed oil prices are depressed by these factors, seeing a sharp decline after resuming quotation. 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.