Today (Mar. 18), 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, as state-level grain depots in Bei’an, Dunhua and Dayangshu have offered a high price of 4.20 yuan/kg to purchase soybeans, domestic soybean prices move higher. Both these are propping up the market. However, Chinese importers are scooping up on Brazilian soybeans due to considerable crush margins. It is reported that China purchases 5-6 cargoes of soybean from Brazil today. Overall, the market for imported soybeans is predicted to keep steady in the short term.

Cottonseed: Cottonseed prices keep steady with individual rises of 0.03 yuan/kg. Traders and oil mills are wary of selling cottonseed, so there is little cottonseed circulating in the market. And pastures are in rigid demand, which leads some traders to tend to raise price. Thus, cottonseed price in individual regions is boosted. In order to avoid risk, inland oil mills mainly purchase on a hand-to-mouth basis, limiting price rises of cottonseed. Additionally, the coronavirus pandemic may impact logistics around the world, and oils and meals futures rebound. It is predicted that short-term cottonseed price will stage a modest rally.

Summary: US soybean futures bounded fractionally on Tuesday. Malaysia’s government will control public movements from March 18 to March 31 amid the Covid-19 outbreak. Under this, palm plantation, crushing mills and refineries will all have to suspend for two weeks, which triggers concerns over palm oil supply in the market. So on the Dalian Commodity Exchange (DCE) today, palm oil futures extend sharp gains and soybean oil is bolstered to move higher. In the spot markets, soybean oil and palm oil rally 100-150 yuan/tonne, attracting some low-level purchases. The demand for oils is turning better, as catering businesses are resuming operations. Soybean oil traded at a high volume of 45,000 tonnes yesterday. Meanwhile, soybean imports are small in March, and soybean stocks have fallen to a near 7-year low of 2.35 mln tonnes in coastal mills. Many mills are in downtime due to soybean shortages, and soybean oil stocks also declining. Besides, April-May soybean imports may also go lower than expected. Rumors abound in the market this morning: one, considering the impact of COVID-19, stevedores at Santos port, Brazil, will stop their activities for 14 days; two, private terminals will not subject to this, for it is a public terminal that apply for the shutdown. These rumors have not been confirmed and leading media like Reuters and Bloomberg also did not have related reports, but the truth is that investors are rushing to cover short positions amid concerns that port logistics in top exporter may be affected by the fast-spreading pandemic. This also helps boost DCE oil futures to move higher. Soybean and its production are highly relying on imports, so market participants can keep a close eye on whether port shipments in exporters such as Brazil, Argentina and the United States will be subject to the pandemic or not. Another rumor at noon told that Malaysia’s Sarawak Government has given permission to the palm oil industry (estates, mills and refineries) in Sarawak to operate during the Covid-19 if they take sanitary and epidemic prevention measures. BMD palm oil rapidly pare gains in afternoon trading, so do DCE oil futures. Rumors are just like wildfires at present, so that the market is volatile. Participants need to strengthen risk prevention.

Soybean oil: GB Grade I soybean oil is mainly priced at 5430-5460 yuan/tonne in domestic coastal areas, up 100-130 yuan/tonne. (Tianjin traders 5430; Rizhao traders 5450; Zhangjiagang traders 5460; and Guangzhou traders 5430-5450). 

Palm oil: RBD palm olein is mainly priced at 4820-5090 yuan/tonne in coastal areas, up 130-150 yuan/tonne. (Tianjin traders 5090,up 150; Rizhao traders 5030, up 150; Zhangjiagang traders 4970, up 140; Guangzhou traders 4820-4830,up 130, and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 50-60 yuan at 7140-7330 yuan/tonne. (not available in Fujian, Guangdong and Guangxi) As rapeseed crush stays at a low level amid a rocky relations between Chin and Canada, rapeseed oil is in tight supply in the market. Besides, many mills have also been in downtime for soybean shortages as soybean imports are smaller this month, so soybean oil stocks are also declining. Over 90% of factories have resumed work, and catering businesses are also resuming operations; hence, the consumption of oils is picking up. This also bolsters rapeseed oil prices to rebound. Rumors abound in the market this morning: one, considering the impact of COVID-19, stevedores at Santos port, Brazil, will stop their activities for 14 days; two, private terminals will not subject to this, for it is a public terminal that apply for the shutdown. These rumors have not been confirmed and leading media like Reuters and Bloomberg also did not have related reports, but the truth is that investors are rushing to cover short positions amid concerns that port logistics in top exporter may be affected by the fast-spreading pandemic. This also helps boost DCE oil futures to move higher. Another rumor at noon told that Malaysia’s Sarawak Government has given permission to the palm oil industry (estates, mills and refineries) in Sarawak to operate during the Covid-19 if they take sanitary and epidemic prevention measures. BMD palm oil rapidly pare gains in afternoon trading, so do DCE oil futures. Rumors are just like wildfires at present, so that the market is volatile. Participants need to strengthen risk prevention.

Cottonseed oil: Cottonseed oil prices are mostly not available today, while some offered prices steadily fluctuate by 100-200 yuan/tonne. Due to the COVID-19, Malaysian government implements nationwide movement control during 18-31 March, 2020. And all the Malaysian plantations, palm oil mills and refineries are likely to cease operation for two week, raise market’s concerns about the palm oil supply. Meanwhile, palm oil on Dalian Commodity Exchange continues to surge today, and soybean oil futures also go up on the news. On the spot market, soybean oil and palm oil up by 100-150 yuan/tonne, stimulating downstream enterprises to make replenishment. And some mills put up cottonseed oil price. But there is no substantial improvement in cottonseed oil trading, and the price still falls in some regions. In addition, rumor at noon has it that Malaysia Sarawak Government has given permission to palm oil industry in Sarawak to operate during the Covid-19 movement restriction order with taking preventive measures, which causes the rises of oils narrow on Bursa Malaysia Derivatives and afternoon session of Dalian Commodity Exchange. As bulk oils market sees a drastic volatility, buyers need to pay attention to the impact on cottonseed oil market.