Today (Mar. 11), the market for oilseeds and oils in China is shown as follows:

 

Cottonseed: Cottonseed prices are mostly not offered today, while some offered prices weakly decline by 0.01-0.06 yuan/kg. The novel coronavirus epidemic has resulted in poor market of cotton-by products, so the market is bearish on cottonseed outlook. Besides, traders and Xinjiang oil mills are active in clearing stocks but inland plants are cautious in purchasing cottonseed, depressing cottonseed price. Nevertheless, cottonseed production in 2019 was lower than previous years and pastures are in rigid demand, limiting the price declines of cottonseed temporarily. It is predicted that short-term cottonseed price will fluctuate weakly.

Summary: The world’s leading economies were adopting measures to abate the impact of the coronavirus on economic activities, so that oil and stock markets rebounded on low-level buying following Monday’s sharp losses, and US soybean futures also ended higher on Tuesday. On China’s Dalian Commodity Exchange today, oil futures also extend gains, bolstered by MPOB’s report. In the spot markets, soybean oil and palm oil go up by 20-50 yuan/tonne, both in tepid trading. Malaysia’s Feb stockpiles went lower than expected to 1.68 mln tonnes, a month-on-month decline of 4.2%. China’s soybean crush also falls as soybean imports are low in March, so soybean oil inventory will slow down its growth. Nevertheless, soybean oil stocks have been quite abundant, while the demand is sluggish due to the epidemic. Moreover, China bought 40 cargoes of Brazilian soybeans last week in view of decent crush margins. And the Chinese government has granted additional-tariff exemptions for some crushers to import US soybeans. Soybean imports are estimated at 7.50, 8.30 and 8.70 mln tonnes in April, June and July respectively, according to preliminary data by Cofeed. Therefore, mills will pick up operation rates again. Meanwhile, the risk of a fall in crude prices remains, as the oil war between Saudi Arabia and Russia are escalating. The coronavirus, which has locked down Italy, is still a driver in the financial market. The overall oil market in China will maintain its weakening trend till the epidemic is under effective control. It is not suggested to be too bullish about the upward momentum even if there are bounces. As oil futures are swinging to down in afternoon session, buyers need to remain cautious.

Soybean oil: GB Grade I soybean oil is mainly priced at 5370-5580 yuan/tonne in domestic coastal areas, mostly up 20-50 yuan with a partial decline of 20 yuan/tonne. (Tianjin traders 5370-5380; Rizhao traders 5440; Zhangjiagang traders 5580; and Guangzhou traders 5420). 

Palm oil: RBD palm olein is mainly priced at 4880-5080 yuan/tonne in coastal areas, mostly up by 30-40 yuan/tonne. (Tianjin traders 5070-5080, up 30; Rizhao traders yet offered; Zhangjiagang traders 5010, up 40; Guangzhou traders 4880, up 30, and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil goes higher in price, of which it settles up 10-20 yuan at 7450-7680 yuan/tonne. (Fujian, Guangdong and Guangxi not offered) Rapeseed crush remains low in China amid a stalemate with Canada, and rapeseed oil is in tight supply in spot markets. Meanwhile, mills will lower down weekly soybean crush to 1.45-1.54 mln tonnes this week and next week, so soybean oil inventory may slow down its growth. However, DCE crush margins for South American soybeans are so considerable that Chinese importers are scooping up soybeans from these suppliers. And China has granted additional-tariff exemptions for some crushers to import US soybeans. Besides, the demand for oils remains extremely low as catering businesses are unable to resume regular operation under the epidemic. With a weak trend in soybean oil and palm oil markets, rapeseed oil prices can’t also buck the trend. Rapeseed oil futures pare most gains in afternoon trading, so buyers need to stay cautious. 

Cottonseed oil: Cottonseed oil prices are mostly not available today, while some offered prices keep steady. The 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 overall operation rate in oil mills is not high. Furthermore, oils on DCE keep rising in the morning session boosted by good news on MPOB. On the spot market, soybean oil and palm oil up by 20-50 yuan/tonne. But oils futures fluctuate to drop in afternoon trading, so buyers can take a wait-and-see attitude.