Today (Feb. 28), the market for oilseeds and oils in China is shown as follows:

 

Cottonseed: Cottonseed is mostly unquoted today, while some offered prices stay stable. The novel coronavirus pneumonia epidemic has resulted in a sharp decline in cottonseed oil, and cottonseed meal price falls back from high levels. In addition, oil enterprises tend to underbid as cottonseed price remains too high. Thus, cottonseed market is dragged down. Nevertheless, pastures are in rigid demand, but there is not much cottonseed circulating in the market, which bolsters cottonseed market. But staple oils slump, and logistics from Xinjiang to inland start recovering. It is predicted that cottonseed market will moderately fall after totally resuming trading. 

Summary: US soybean futures rose slightly last night, but after nearly fifty countries reported the outbreak of the novel coronavirus pneumonia, financial market slumped, of which US three major indexes-Dow Jones Industrial Average, S&P 500 Index and NASDAQ-all fell by over 4%, which was the first time since last October. Oil futures all decline on the Dalian Commodity Exchange today on concerns over the demand for edible oils. In the spot markets, soybean oil drops by 40-120 yuan/tonne and palm oil down by 140-150 yuan/tonne, both in thin trading. Oil mills may have picked up soybean crush to 1.85 mln tonnes this week, but leading catering businesses have not opened, so the demand for soybean oil remains low, leading to a constant increase in its stocks. And some mills are even facing swelling stocks, including leading state-owned and foreign-invested factories. In the meantime, Malaysia’s palm oil stocks will also go into rebuilding due to growing output and declining exports. Cracked down by bearish fundamentals and concerns over the spreading epidemic, short-term oil market is predicted to maintain its weakening trend. Investors are suggested to remain cautious and buyers to stay on the sidelines for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5710-5860 yuan/tonne in domestic coastal areas, a decline of 40-120 yuan/tonne. (Tianjin traders 5710-5730; Rizhao traders 5830; Zhangjiagang traders 5860; and Guangzhou traders 5680-5690). 

Palm oil: RBD palm olein is mainly priced at 5020-5230 yuan/tonne in coastal areas, mostly down by 140-150 yuan/tonne. (Tianjin traders 5220-5230, down 150; Rizhao traders yet offered; Zhangjiagang traders 5170-5180, down 150; Guangzhou traders 5020-5040, down 140; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil declines in price, of which it settles down 30-50 yuan at 7940-8060 yuan/tonne. (Fujian and Guangdong not offered; Guangxi 7940) The pessimism on the demand prospect is stoked by the spreading epidemic globally. China’s oils stocks keep increasing, especially soybean oil. And this week, domestic oil mills will probably pick up soybean crush to a very high level of 1.85 mln tonnes. Moreover, due to the epidemic, a majority of catering businesses have not opened. And leading groups and companies as well as traders have stocked up for the holidays previously, and now are digesting stocks, and they are now not willing to sign new contracts. The sharp decline in demand has weighed down the oil market. But the unsettled issue is hindering rapeseed exports from Canada to China, so Chinese mills have low rapeseed stocks for use now. And spot rapeseed oil is in tight supply, which makes it more resilient than other oil products. Rapeseed oil will be hard to immune from the overall bearish market, and may fall from the high level. Rapeseed oil futures are expanding losses in afternoon trading, and buyers can stay on the sidelines for the moment.

Cottonseed oil: Cottonseed oil is mostly unquoted today, while some offered prices are flat. Being affected by the pneumonia epidemic, catering enterprises have yet to recover, so the demand is always weak in oils market with few trading in cottonseed oil. Moreover, most enterprises do not offer the price as a result of no deals. Besides, financial markets plummeted as the novel coronavirus has spread to nearly 50 countries around the world, and U.S. three major stocks index (DJIA, S&P 500 and NASDAQ) firstly fell more than 4% since last October. Moreover, oils futures on Dalian Commodity Exchange drop across the board today over the fears of demand for edible oil. On the spot market, soybean oil down by 40-120 yuan/tonne and palm oil down by 150 yuan/tonne. Consequently, cottonseed oil prices are depressed by these factors. But the overall 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.