Today (Feb. 20), the market for oilseeds and oils in China is shown as follows:

 

Cottonseed: Xinjiang cottonseed prices are individually stable today. Pastures are in rigid demand, but there is not much cottonseed circulating in the market. Due to the short supply, short-term cottonseed market may go strongly under the support. But being affected by the novel coronavirus pneumonia epidemic, oil mills have trouble in purchasing cottonseed 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, as oil plants in Xinjiang cannot resume production, some enterprises sell cottonseed in stock. Thus, cottonseed market may still fall back after totally resuming trading.

Summary: US soybean futures posted slight gains last night, but oil futures continue to drop on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil decline by 40-50 yuan/tonne, both in tepid trading. In spite of an inflection point in the epidemic and slightly loosen road control, mills are still slow in making shipments as the demand is quite weak in the market when the catering industry has yet recovered. Meanwhile, Chinese mills are actively buying up on soybeans from Brazil and US PNW, and with soybean crush returning to nearly 1.80 mln tonnes, soybean oil stocks will come under greater pressure. The stocks are expected to increase to abround 1.10 mln tonnes this week. And palm oil stocks have already stayed above 940,000 tonnes. These are bearish to the market. But Malaysia palm oil exports showed a month-on-month increase of 8.7% in Feb 1-20, according to data from ITS. Besides, the bearish pressure in Chinese market has somewhat released after this round of sharp declines, and soybean oil even rebounds technically in afternoon trading. In this case, soybean oil spot market may follow to bounce moderately in the short term. Overall, the market will keep range-bound with a weakening trend until the epidemic is under the control. Buyers out of stock can make small replenishment on low and stable prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5960-6250 yuan/tonne in domestic coastal areas, some down by 50 yuan/tonne. (Tianjin traders 5960-5980; Rizhao traders 6030; Zhangjiagang traders 6250; and Guangzhou traders 6030). 

Palm oil: RBD palm olein is mainly priced at 5570-5780 yuan/tonne in coastal areas, down by 40-50 yuan/tonne. (Tianjin traders 5700, down 40; Rizhao traders 5770-5780, down 50; Zhangjiagang traders 5750, flat; Guangzhou traders 5570-5580, down 50; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil declines in price, of which it settles down 120-150 yuan at 7960-8140 yuan/tonne. (Fujian 7960; Guangdong and Guangxi not offered) Attracted by good crush margins, Chinese mills are buying up on soybeans from Brazil and US PNW, so soybean crush will further increase 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 tourism, which has thus led to a sharp increase in soybean oil and palm oil stockpiles. Besides, rising palm oil output in Malaysia is also weighing down the oil market. Rapeseed oil futures prices are posting huge declines, so buyers can wait for the moment. 

Cottonseed oil: Cottonseed oil is mostly unquoted today and partial cottonseed oil steadily down by 200 yuan/tonne. Although there has appeared a inflection point in the pneumonia epidemic and the traffic control has been relaxed, catering enterprises have yet to recover, so cottonseed oil trading is also tough. Besides, oils on Dalian Commodity Exchange continue to pare gains today, and soybean oil and palm oil down by 40-50 yuan/tonne in the spot market. Consequently, cottonseed oil prices are depressed by these factors. 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.