Today (Mar. 5), 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. Pastures are in rigid demand and some inland oil mills make replenishment, which offer support to cottonseed market. 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 market. It is predicted that short-term cottonseed price will stay stable with fluctuations and moderately fall after market totally resuming trading. 

Oils: 

Summary: US soybean futures rose last night, as Argentina would raise export duties for soybeans to 33% from current 30%. And Malaysia’s palm oil futures jumped higher by 5% yesterday as buyers were stocking up ahead of the Muslim holy month of Ramadan and expectations of a decline in 2019/2020 production. And oil futures are also boosted to continue to rebound on the Dalian Commodity Exchange today. In the spot markets, soybean oil mostly increases by 10-50 yuan/tonne and palm oil mostly up 50-60 yuan/tonne to attract some low-level purchases, but the total trading is still thin. Soybean arrivals at domestic ports will be only 4.82 mln tonnes in March, so soybean crush is likely to drop significantly to 1.63 mln tonnes in the next two weeks. Moreover, soybean oil saw the trading at 10,000 tonnes yesterday. It is not big volume, but it is a sign of better trading in the market. Therefore, oil mills are trying to support prices, and oil market also posts short-term bounces. However, soybean oil stocks are still rising and may increase to around 1.40 mln tonnes next week, and some mills are facing swelling stocks at present. Meanwhile, DCE crush margins for Brazilian soybeans in Mar-Jul stay at 204-282 yuan/tonne, so Chinese importers are still purchasing soybeans. Besides, global commodity markets are volatile under the spread of the novel coronavirus pneumonia, which is also a threat to the oil market. Currently, the oil market is bouncing to adjust after some extreme declines, so it cannot be said that the market is not weak any longer. Buyers with low stocks are suggested to make small replenishment on the dips, but to keep light stocks before the situation turns clear.

Soybean oil: GB Grade I soybean oil is mainly priced at 5640-5760 yuan/tonne in domestic coastal areas, mostly up by 10-50 yuan/tonne and with a partial decline of 10-40 yuan/tonne. (Tianjin traders 5650-5670; Rizhao traders 5710; Zhangjiagang traders 5760; and Guangzhou traders 5640-5650). 

Palm oil: RBD palm olein is mainly priced at 5040-5340 yuan/tonne in coastal areas, mostly up by 50-60 yuan/tonne. (Tianjin traders 5200, up 50; Rizhao traders 5340; Zhangjiagang traders 5160-5170, up 60; Guangzhou traders 5040-5050, up 60; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil is slightly higher in price, of which it settles up 10-20 yuan at 7730-7850 yuan/tonne. (Fujian 7770; Guangdong not offered; and Guangxi not offered) India will not extend the 5% tax on the import of refined palm oil from Malaysia following a detente between these two countries, and Malaysia’s palm oil futures perform strong these days. In China, oil mills will reduce soybean crush to around 1.65 mln tonnes this week and next week, so soybean oil stocks may slow down growth. Moreover, rapeseed crush remains at a low level amid a stalemate between China and Canada, and spot rapeseed oil is also in tight supply. Hence, short-term rapeseed oil may follow futures to move higher moderately, and buyers understock are suggested to make some replenishment on the dips and remain cautious in chasing after high prices. 

Cottonseed oil: Cottonseed oil is mostly unquoted today, while some offered prices fluctuate by 50-100 yuan/tonne. But the overall operating rate in oil plants is not high now and many oils mills in Xinjiang have outstanding contracts. Besides, the stockpiling before Muslim Ramadan, coupled with the expected slide in 2019/20 palm oil production led Malaysian palm oil jumped higher by 5% yesterday. As a result, it pulls oils futures on Dalian Commodity Exchange continue to rebound today. On the spot market, soybean oil and palm oil mostly up by 20-60 yuan/tonne, boosting cottonseed oil prices in some regions. But catering enterprises have yet to recover, so the demand is always weak in oils market with few new orders in cottonseed oil. Thus, the stocks in factories increase, depressing cottonseed oil prices. It is predicted that short-term prices may move sideways with fluctuations. Buyers are suggested to make small replenishment on the dips and remain cautious in chasing up prices too far.