Today (Mar. 4), the market for oilseeds and oils in China is shown as follows:

 

 

Cottonseed: Cottonseed prices are partially not offered today, while some offered prices are stable with individual rises of 0.02 yuan/kg. Pastures are in rigid demand. And some inland oil mills make replenishment so that a few factories have a better trading of cottonseed and the prices rebound. But the novel coronavirus pneumonia epidemic has resulted in a sharp decline in cottonseed oil. As the market is bearish on cottonseed outlook, oil mills are cautious in purchasing cottonseed, limiting the price rises of it. It is predicted that cottonseed market will moderately fall after totally resuming trading. 

 

 

Summary: Market sentiment was alleviated by the US Federal Reserve’s announcement to cut its benchmark interest rates by 50 basis points. And Argentina was set to raise soybean export tax to 33% from 30% currently, which was favourable to bolster the prospect of US exports. US soybean futures extended gains last night, but oil futures are in correction range on the Dalian Commodity Exchange today. In the spot markets, soybean oil posts a partial decline of 20-50 yuan/tonne and palm oil fluctuates by 20-30 yuan/tonne, both in lukewarm trading. The upward trend in stock market was helped by the Fed 's emergency rate cut, but the market finally closed with losses as participants turned concerned about the economy. In China, soybean oil stocks keep increasing significantly and may go to around 1.40 mln tonnes next week, some mills are choked with swelling stocks due to weak demand from catering services under the epidemic. And crush margins for Brazilian soybeans stay high at 199-278 yuan/tonne, so China bought 4 cargoes of Brazilian soybeans again on Tuesday after 4-5 cargoes on Monday. The declines are smaller after a consecutive sharp downtrend, but oil prices now still have little upward potential. With the spread of the coronavirus globally, the oil market is predicted to keep its weakening trend with some short-term and small technical bounces. Participants can keep light stocks for the moment.

 

Soybean oil: GB Grade I soybean oil is mainly priced at 5600-5750 yuan/tonne in domestic coastal areas, partially down by 20-50 yuan/tonne. (Tianjin traders 5630-5640; Rizhao traders 5680-5690; Zhangjiagang traders 5750; and Guangzhou traders 5600-5610). 

 

Palm oil: RBD palm olein is mainly priced at 4920-5090 yuan/tonne in coastal areas, mostly down by 30 yuan/tonne. (Tianjin traders 5090, down 30; Rizhao traders yet offered; Zhangjiagang traders 5040, down 30; Guangzhou traders 4920-4940, flat; and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil is down in price, of which it settles down 30-50 yuan at 7720-7830 yuan/tonne. (Fujian 7760; Guangdong not offered; and Guangxi not offered) The consumption of oils is severely hit by the epidemic, for which schools are postponing openings and some catering business have still suspended. The gloomy demand is stepping up stocks of oil products. In addition, Chinese oil mills are attracted to purchases South American soybeans due to handsome crush margins on the DCE. Soybean arrivals ar ports are expected to reach 24.3 mln tonnes from April to June. There is no bullish news in rapeseed oil market, so the market declines under pressure. Buyers can wait for the moment.

 

Cottonseed oil: Cottonseed oil is mostly unquoted today, while some offered prices are steady. Being affected by the pneumonia epidemic, catering enterprises have yet to recover, so the demand is always weak in oils market with few new orders in cottonseed oil. As a result, the stocks in factories increase. Besides, partial spot soybean oil down by 20-50 yuan/tonne today. Thus, cottonseed oil prices are depressed by these factors. But the overall operating rate in oil plants is not high now and many oils mills in Xinjiang have outstanding contracts, which lead 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.