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Daily Review on Markets for Oilseeds and Oils in China--10/3/2020

2020-03-10 www.cofeed.com
Today (Mar. 10), the market for oilseeds and oils in China is shown as follows:
 
Oilseeds:
 
Cottonseed oil: Cottonseed oil prices are mostly not available today, while some offered prices decline by 100-400 yuan/tonne. Spot soybean oil fell sharply tracking futures yesterday, thereby causing today’s decline in cottonseed oil price. But he demand for cottonseed oil is always weak with few new orders in the near term, so the stocks in factories increase. And the weak trend will not change in a short time. But the operation rate in oil mills is not high. Furthermore, oils futures fluctuate to rebound after the trading resuming today. On the spot market, soybean oil partly rises by 20 yuan/tonne and palm oil up by 50-100 yuan/tonne. Therefore, participants can focus on if it will bring some support, and buyers can take a wait-and-see attitude.
 
Oils: 
 
Summary: US soybean futures fell sharply last night, as a crash in US stock markets triggered a trading halt due to the quickly-spreading coronavirus and plunging crude oil. On China’s Dalian Commodity Exchange, oil futures hit the limit-down level yesterday, but fluctuate to rebound today with the panic easing to a certain extent. In the spot markets, soybean oil posts a partial rise of 20 yuan/tonne and palm oil up 50-100 yuan/tonne, to attract some low-level purchases. Mills have reduced soybean crush as imports arriving at domestic ports will be smaller in March, which will help soybean oil stock slow down its growth momentum. But soybean oil stocks have been quite abundant, and a short-term decline in operation rates will have little potential in boosting the oil market. Moreover, the demand for oils have been very sluggish. In the meantime, Chinese importers are purchasing Brazilian soybeans due to decent crush margins, and the Chinese government has granted new tariff exemptions on US soybean imports. Soybean imports are forecast to reach 7.50 mln tonnes in April and 8.30 mln tonnes in May, according to the latest survey by Cofeed. Besides, Malaysia has seen higher production and lower exports. And stock markets and crude oil prices have been weakening. The fundamentals remain bearish. The oil market will be weakening till the epidemic is under effective control. Although there are short-term bounces after excessive losses, it is not suggested to be too bullish about the upward momentum. Buyers can keep light stockpiles for the moment.
 
Soybean oil: GB Grade I soybean oil is mainly priced at 5420-5550 yuan/tonne in domestic coastal areas, a partial rise of 20 yuan/tonne. (Tianjin traders 5420; Rizhao traders 5480; Zhangjiagang traders 5550; and Guangzhou traders 5430-5440). 
 
Palm oil: RBD palm olein is mainly priced at 4900-5080 yuan/tonne in coastal areas, mostly up by 50-100 yuan/tonne. (Tianjin traders 5080, up 90; Rizhao traders yet offered; Zhangjiagang traders 5000, up 50; Guangzhou traders 4900, up 100, and Xiamen yet offered). 
 
Imported rapeseed oil: Imported rapeseed oil goes higher in price, of which it settles up 100-120 yuan at 7460-7550 yuan/tonne. (Fujian, Guangdong and Guangxi not offered) China and Canada have not come to a detente in their stalemate. In this case, domestic oil mills keep rapeseed crush at a low level; hence, spot goods are in short supply at present. Besides, soybean arrivals at domestic ports are smaller in March, so that mills have to cut soybean crush to 1.45-1.54 mln tonnes for both next two weeks for a lack of soybeans. This will help support the rapeseed oil market. However, domestic oil products are in adequate supply, as the demand remains extremely low when a majority of catering businesses are unable to open under the epidemic. In addition, Chinese oil mills are still purchasing South American soybeans due to handsome crush margins on the DCE, and imports from the US are also forecast to grow. With a weak trend in soybean oil and palm oil markets, rapeseed oil prices can’t also buck the trend and may have limited potential to rebound. Buyers are suggested not chase after excessively high prices. 
 
Cottonseed oil: Cottonseed oil prices are mostly not available today, while some offered prices decline by 100-400 yuan/tonne. Spot soybean oil fell sharply tracking futures yesterday, thereby causing today’s decline in cottonseed oil price. But he demand for cottonseed oil is always weak with few new orders in the near term, so the stocks in factories increase. And the weak trend will not change in a short time. But the operation rate in oil mills is not high. Furthermore, oils futures fluctuate to rebound after the trading resuming today. On the spot market, soybean oil partly rises by 20 yuan/tonne and palm oil up by 50-100 yuan/tonne. Therefore, participants can focus on if it will bring some support, and buyers can take a wait-and-see attitude.
 
(USD $1=CNY¥6.94)