Today (Mar. 16), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Argentine soybean is priced steadily at 3700-3720 yuan/tonne at Shandong port today. Imported soybean supply is low at ports currently. Meanwhile, domestic soybean prices are firm. These help support the market for imported soybeans. However, the demand is tepid in the market. In addition, all agencies have increased their estimates for Brazilian soybeans, a sign that local farmers will harvest massive crops. And China also bought 35 cargoes from Brazil last week. Therefore, imported soybean market is also under pressure. 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 0.01-0.08 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 take a hand-to-mouth buying, 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: US soybean fell further last Friday, which could be attributed to an estimate for bumper harvests in South America, the national emergency over the fast-spreading coronavirus pandemic, as well as an uncertain prospect for US soybean exports. However, in its most dramatic move, the U.S. Federal Reserve on Sunday announced to cut its benchmark interest rate by 100 basis points to near zero and to launch a massive $700 bln quantitative easing program, which may help bolster the outside markets in the short term. And in China, soybean oil stocks declined by 0.5% to 1.392 mln tonnes in the week ending March 13 after soybean crush went down to 1.47 mln tonnes. And palm oil stockpiles also dropped by 5.7% to 846,600 tonnes. Therefore, oil futures fluctuate to rise on the Dalian Commodity Exchange today. In the spot markets, soybean oil partially goes up by 10-100 yuan/tonne and partially down by 10 yuan/tonne, and palm oil fluctuates by 10-40 yuan/tonne. And there are some purchases at low levels. Soybean imports are relatively small in March, and soybean stocks fall to 2.35 mln tonnes in domestic coastal oil mills this week, a weekly decline of 18% and a year-on-year decline of 39%. Mills have been lowering down soybean crush, and the demand is fractionally better as catering businesses are resuming operations. However, soybean oil stocks are still abundant in China. Meanwhile, crush margins for Brazilian soybeans has risen to 270-330 yuan/tonne, so Chinese importers bought 35 cargoes from Brazil last week. Besides, China has granted additional-tariff exemptions for some crushers to import US soybeans. Chinese buyers purchased at least two batches of US soybeans in the past week due to delayed shipment at Brazilian ports, according to a report by foreign media. Overall, the oil market sees a bounce after consecutive huge decline, but it has weak upward potential now due to the spreading pandemic. Buyers are suggested to avoid risks of frequent fluctuations. 

 

Soybean oil: GB Grade I soybean oil is mainly priced at 5310-5450 yuan/tonne in domestic coastal areas, with a partial rise of 10-100 yuan and a partial decline of 10 yuan/tonne. (Tianjin traders 5310-5320; Rizhao traders 5370; Zhangjiagang traders 5450; and Guangzhou traders 5340-5350). 

 

Palm oil: RBD palm olein is mainly priced at 4640-4880 yuan/tonne in coastal areas, fluctuating by 10-40 yuan/tonne. (Tianjin traders 4880, up 10; Rizhao traders yet offered; Zhangjiagang traders 4820, up 40; Guangzhou traders 4640, down 10, and Xiamen yet offered). 

 

Imported rapeseed oil: Imported rapeseed oil recoups some declines in price today, of which it settles up 30-50 yuan at 7050-7340 yuan/tonne. (Fujian, Guangdong and Guangxi not offered) Rapeseed crush in China stays at a low level due to a stalemate with Canada, so that rapeseed oil also falls into tight supply. In the meantime, soybean oil stocks are expected to drop slightly as soybean crush will probably decline to around 1.40 mln tonnes this week. However, soybean imports are estimated to reach 24.50 mln tonnes in the second quarter. And China has granted additional-tariff exemptions for some crushers to import US soybeans. This will lift soybean supply in China. Moreover, the demand from catering businesses are extremely low as diners are still in a minority. As of March 13th, rapeseed oil stocks rose by 2% to 310,000 tonnes and soybean oil stocks also stayed at a high level 1.39 mln tonnes. In a myriad of bearish fundamentals, rapeseed oil market is predicted to have weak potential for bounces and to maintain a weakening trend till a total control on the epidemic. 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. The catering industry is gradually recovering but most restaurants mainly provide take-out services. And 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. Thus, the weak trend of cottonseed oil will not change in a short time. But some oil mills still have outstanding contract and would not sell low inventory of spots at a low price. Furthermore, oils on Dalian Commodity Exchange today fluctuate to rise today, and spot soybean oil partly up by 10-100 yuan/tonne. Accordingly, cottonseed oil will be resilient temporarily. Buyers can take a wait-and-see attitude.