Today (Mar. 13), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Argentine soybean is priced at 3700-3720 yuan/tonne at Shandong port today. While imported soybean supply are low at ports currently, domestic soybean prices keep firm as traders are unable to launch much market volume, which helps support the market for imported soybeans. However, the latest estimate from CONAB has raised Brazil’s soybean production by 1 mln tonnes to 124 million tonnes, and all agencies have increased their estimates, a sign that Brazil will harvest massive crops. Overall, the market for imported soybeans is predicted to keep steady in the short term.

Cottonseed: Cottonseed prices are mostly not offered today, while some offered prices decline by 0.04-0.09 yuan/kg. The novel coronavirus epidemic has resulted in poor market of cotton-by products, so the market is bearish on cottonseed outlook. Besides, inland oil mills are cautious in purchasing cottonseed, so the price continues to drop. Nevertheless, traders and oil mills are in no hurry to sell cottonseed due to a sharp decline of the price recently. 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: Driven by the novel coronavirus, US stock market crashed to post a biggest single-day loss since 1987 and triggered circuit breaker for twice this week. And South American soybeans headed towards a prospect of bumper harvest. Therefore, US soybean fell sharply last night. And oil futures also continue sharp losses on the Dalian Commodity Exchange today. In the spot markets, soybean oil declines by 20-100 yuan/tonne and palm oil down 60-130 yuan/tonne, both in lukewarm trading. Outside markets are crippling under the spread of the coronavirus across the globe coupled with a collapse in crude oil. Albeit with small soybean imports in March, a big drop in soybean crush and slightly better demand for oils in these few days, soybean oil stocks remain huge and some mills still have swelling stockpiles. Moreover, Chinese importers are buying up on Brazilian soybeans lured by considerable crush margins, and China has also granted additional-tariff exemptions for some crushers to import US soybeans. Soybean imports are estimated to reach 24.5 mln tonnes from April to June, and mills will pick up operation rates again. In the meantime, there has been collapses in crude oil prices. And Malaysia’s palm oil exports are weak overall in March, while its output will see an increase seasonally. Overall, the oil market will continue to come under pressure till a total control on the epidemic, but there may be short-term technical corrections following sharp losses in futures trading. Buyers out of stock are suggested to wait for low and stable prices to make small replenishment and remain cautious in chasing after high prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5230-5350 yuan/tonne in domestic coastal areas, with a decline of 20-100 yuan/tonne. (Tianjin traders 5230; Rizhao traders 5260; Zhangjiagang traders 5250; and Guangzhou traders 5230-5260). 

Palm oil: RBD palm olein is mainly priced at 4540-4880 yuan/tonne in coastal areas, mostly down 60-130 yuan/tonne. (Tianjin traders 4870-4880, down 60; Rizhao traders 4740, down 110; Zhangjiagang traders 4700, down 100; Guangzhou traders 4540, down 130, and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil falls in price, of which it settles down 150-180 yuan at 7010-7270 yuan/tonne. (Fujian, Guangdong and Guangxi not offered) China’s soybean imports are expected to be 24.5 mln tonnes in the second quarter, a year-on-year increase of nearly 9%. And it has granted additional-tariff exemptions for some crushers to import US soybeans. Therefore, soybean supply shows a loosening prospect. On the demand front, the consumption of oils remains sluggish in China as catering businesses are unable to resume regular operation under the epidemic. And in Malaysia, palm oil exports are weak overall in March, while its output will see an increase seasonally. In a myriad of bearish fundamentals, rapeseed oil market is predicted to maintain a weakening trend till a total control on the epidemic, but there may be short-term technical rebound following sharp losses in futures trading. Buyers can keep light stockpiles.

Cottonseed oil: Cottonseed oil prices are mostly not available today, while some offered prices keep steady. Some prices further decline by 200 yuan/tonne. There is no significant improvement in cottonseed oil trading, putting mental stress on some oil mills. In consequence, they mostly sell cottonseed oil along with the production, which causes lower transaction prices. As a result of the novel coronavirus pandemic, U.S. markets has recorded the most declines in a single day since the 1987 crash, and the circuit-breaker has been triggered twice this week. Besides, there will likely be a bumper crop in South America soybeans. But U.S. soybeans slumped overnight. Furthermore, oils futures on DCE today fall sharply again. On the spot market, soybean oil down by 20-100 yuan/tonne and palm oil down by 60-130 yuan/tonne. Thus, the weak trend of cottonseed oil will not change in a short time. But some oil mills have outstanding contract and would not sell low inventory of spots at a low price, which leads cottonseed oil to be resilient temporarily. Buyers can take a wait-and-see attitude.