Today (Feb. 21), the market for oilseeds and oils in China is shown as follows:

 

 

Cottonseed: Cottonseed is mostly unquoted today, while some prices for Xinjiang cottonseed are stable. 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 fell last night on concerns over a decline in demand from China and abundant harvest in Brazil, but BMD palm oil futures closed with gains last night on improved exports. Oil futures moderately increase on the Dalian Commodity Exchange today. In the spot markets, palm oil goes up by 10-70 yuan/tonne, but due to great pressure from its fundamentals, soybean oil bucks the trend to post a partial decline of 10-30 yuan/tonne. The demand for soybean oil is extremely weak, as the catering business is unable to reopen under the epidemic. Moreover, China might have bought a total of 20 cargoes of soybeans from Brazil from Monday to Thursday. In the meantime, soybean oil stocks will mount further higher, as mills will pick up soybean crush to nearly 1.80 mln tonnes both this week and next week. Some mills, no matter in the northern regions or the south, have been bothered by swelling inventories at the moment. Therefore, there is still pressure in the oil market. But after consecutive losses, oil futures have welcomed some technical bounces. Besides, more and more enterprises have resumed work as the epidemic has spread at a slower pace domestically. And palm oil exports have also improved in Malaysia. The oil market is thus bolstered to see a short-term rebound, but it will not be rising sharply until the epidemic gets under the control. Buyers can keep light positions for the moment.  

 

Soybean oil: GB Grade I soybean oil is mainly priced at 6000-6350 yuan/tonne in domestic coastal areas, some down by 10-30 yuan/tonne. (Tianjin traders 6000-6020; Rizhao traders 6040; Zhangjiagang traders 6350; and Guangzhou traders 6070-6080). 

 

Palm oil: RBD palm olein is mainly priced at 5590-5850 yuan/tonne in coastal areas, up by 10-70 yuan/tonne. (Tianjin traders 5780-5800, up 30; Rizhao traders 5850, up 70; Zhangjiagang traders yet offered; Guangzhou traders 5590-5610, up 10; and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil goes up in price, of which it settles up 30-50 yuan at 8010-8190 yuan/tonne. (Fujian 8010; Guangdong 8010; and Guangxi not offered) Chinese mills have little rapeseed in storage amid a stalemate between China and Canada, and they are also stalling rapeseed oil sales due to low stocks, which help prop up the market. But the demand is also weak as the catering business has not recovered. Besides, China was buying up on soybeans from Brazil and US PNW previously, and with mills picking up soybean crush to nearly 1.80 mln tonnes, soybean oil will continue to be under growing supply pressure. Rapeseed oil is relatively resilient due to its tight supply, and will probably fluctuate at the high level in the short term. Buyers can wait for the moment. 

 

Cottonseed oil: Cottonseed oil is mostly unquoted today and partial cottonseed oil is flat. Although there has appeared an 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, partial soybean oil drops by 10-30 yuan/tonne. Consequently, cottonseed oil prices are depressed by these factors. But the operation rate in oil plants stays at a low level now, 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 risk in going down. Buyers can take a wait-and-see attitude.