Today (Apr. 1), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: The reference price for Argentine soybean is 4,400 yuan/tonne at port today, a rise of 100 yuan/tonne from yesterday. As port soybeans are not in huge supplies at present and domestic soybean prices also keep rising, participants in the market for imported soybeans have a strong sentiment of chasing after high prices. In addition, the market is worried about soybean delivery and shipments in South America. These are all bullish to the market for imported soybeans. However, Brazil’s soybean vessels to China hit a record high in March with a total of 9.26 mln tonnes shipped out as of March 30th, so soybean arrivals at ports may reach 8.9 mln tonnes in May. With bullish factors dominating, the market for imported soybeans is predicted to keep firm in the short term.

Cottonseed: Cottonseed prices keep steady. Ranchers are in rigid demand and cottonseed oil price rises and cottonseed meal price remains high, giving confidence to cottonseed market, so traders have a strong willingness to raise price. But inland oil mills are wary of purchasing cottonseed due to the high price, so there is not much trading yet. Particularly, oils and meals futures decline today on the news that China will resume imports of Canadian canola seed. Thus, cottonseed market is curbed. It is expected that short-term cottonseed price will fluctuate at a narrow range.

Summary: US soybean futures rose on Tuesday due to lower planting acreage than the forecast. Oil futures continue declines on the Dalian Commodity Exchange (DCE) today, although they actually stay above the previous close in morning session. In the spot markets, soybean oil and palm oil fluctuate partially by 20-60 yuan/tonne, and the trading is not very much due to expanding losses on the DCE in afternoon session. Rapeseed futures are the worst performer today, as sources said that China would allow to resume some Canadian canola imports. Moreover, China has been purchasing South American soybeans since gross crush margins stay as high as 243-313 yuan/tonne for April-July shipments. And there is a lack of buying on the DCE. Hence, domestic oil market fluctuates to stay in the correction territory in these few days. Although two Malaysian palm oil grower groups asked the government of Sabah to reconsider the extension of an order suspending palm operations, there is a potential of an interference in palm plantation operations in Indonesia since the country has announced a public emergency. This adds a variable to palm oil supply in top suppliers. Meanwhile, operation rates for soybean crush will be low in both next two weeks, and the demand for low-priced oils is good now as schools will open soon, so soybean oil and palm oil stocks have been declining for weeks in row. In a hybrid of the bull and the bear, it is not suggested to go short completely. The overall oil market may fluctuate frequently, and buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5560-5650 yuan/tonne in domestic coastal areas, partially fluctuating by 20-40 yuan/tonne. (Tianjin traders 5630; Rizhao traders 5650; Zhangjiagang traders 5600; and Guangzhou traders 5560). 

Palm oil: RBD palm olein is mainly priced at 4990-5190 yuan/tonne in coastal areas, mostly up 50-80 yuan/tonne. (Tianjin traders 5170,up 80; Rizhao traders 5190, up 60; Zhangjiagang traders 5100-5110, up 50; Guangzhou traders 4990-5000,up 60; and Xiamen not available). 

Imported rapeseed oil: Imported rapeseed oil drops in price today, of which it partially settles down 80-100 yuan at 6860-7140 yuan/tonne. (Fujian 6990; Guangdong 6890; and Guangxi 6860) Sources said China has agreed to allow imports of Canadian canola to resume, and the agreement was reached during a call held by China’s customs administration and Canada’s farm ministry on Tuesday. And the two sides also agreed that the percentage of foreign materials in the canola shipments must be below 1%. Rapeseed oil futures are thus losing ground. Besides, Chinese buyers are still scooping up on South American soybeans due to considerable crush margins, under which May-June soybean imports will significantly jump to 18 mln tonnes. Moreover, April-May rapeseed imports are also forecast at around 500,000 tonnes. The outside markets are volatile at present. Hence, rapeseed oil market will probably follow futures to fluctuate to decline in the short run, and buyers can wait for the moment.

Cottonseed oil: Cottonseed oil prices are stable today. Catering businesses resume the services in succession and schools are about to reopen. Due to the good demand for oils at the low base, the inventories of soybean oil and palm oil keep declining, so factories are optimistic about the sales of cottonseed meal. However, the demand for cottonseed oil as blending oil is limited after a price hike. Besides, rapeseed oil futures and oils on Dalian Commodity Exchange are on the decline on the news that China will resume imports of Canadian canola seed, dragging down cottonseed oil market. Therefore, cottonseed oil market is predicted to move sideways with fluctuations in the near term. Buyers can stay on the sideline.