Today (Apr. 3), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: The reference price for Argentine soybean is 4450-4500 yuan/tonne at port today. As port soybeans are not in huge supplies at present, of which it is only around 10,000 tonnes at Shandong port. Moreover, domestic soybean prices also keep strengthening. Hence, participants in the distributing soybeans have a strong sentiment for higher prices. In addition, there are concerns over soybean delivery and shipments from South American producers. These are all bullish to the market for imported soybeans. However, Brazil’s soybean shipment heading for China hit a single-month record high in March to reach 10 mln tonnes, so soybean arrivals at domestic ports are forecast to be huge, which is still a curb on the market. Dominated by bullish factors, the market for imported soybeans is predicted to keep firm in the short term.

Cottonseed: Cottonseed prices keep steady today. Cottonseed traders keep propping up price as pastures still make replenishment amid the rigid demand. But meals on Dalian Commodity Exchange continue dropping today, seeing poor trading in cottonseed meal. Many oil plants stop purchasing cottonseed. Moreover, soybean oil and soybean meal also fall back, dragging down cottonseed price. It is expected that short-term cottonseed price will fluctuate at a narrow range.

Summary: The COVID-19 led to a sharp increase in people apply for the unemployment benefits in the U.S. and might caused a global economic recession, and there were concerns over subdued demand in U.S. soybean exports. US soybean futures fell on Thursday. But Brent crude soared 47% for a time on Thursday, as President Donald Trump tweeted that he expected Saudi Arabia and Russia to reach an agreement to significantly cut production. Therewith, Russia said “No, there was no such conversation” between Putin and the Saudi crown prince, and Saudi Arabia also did not confirm a production cut. It was just a call for a discussion on production cuts between OPEC and Russia. Therefore, Brent crude oil pared some gains and WTI crude oil settled up 24.67% at 25.32 USD a barrel. On the Dalian Commodity Exchange today, soybean oil futures stay below the previous close in spite of some rises, and palm oil continue to decline. In the spot market, soybean oil goes down 20-70 yuan/tonne and palm oil down 130 yuan/tonne with some purchases at low-level prices,but the overall trading is not that huge. There is a myriad of bearish factors together dragging down the oil market today: China will resume canola imports from Canada; gross crush margins for South American soybeans still stay high at 258-330 yuan/tonne; Brazil’s soybean vessels to China hit a single-month high of 10 mln tonnes in March; global catering industry is crippling due to the pandemic; and a Malaysian industry minister pointed out that there would be challenges in carrying out the B20 mandate. However, mills will keep low operation rates in the next two weeks for a lack of soybean shortages, and the demand for low-priced soybean oil is good as schools will open soon; hence, people are even lining up to take delivery in some place such as Guangxi and Guangdong. In addition, there are still concerns about commodity imports due to the spread of the novel coronavirus, which will support the oil market. A hybrid of the bull and the bear may add to the fluctuations in the market. Participants are suggested to balance well between selling and buying.

Soybean oil: GB Grade I soybean oil is mainly priced at 5490-5620 yuan/tonne in domestic coastal areas, a decline of 20-70 yuan/tonne. (Tianjin traders 5560; Rizhao traders 5660; Zhangjiagang traders 5620; and Guangzhou traders 5490-5510). 

Palm oil: RBD palm olein is mainly priced at 4860-5040 yuan/tonne in coastal areas, mostly down by 130-140 yuan/tonne. (Tianjin traders 5030,down 130; Rizhao traders 5040, down 140; Zhangjiagang traders 4960, down 130; Guangzhou traders 4860-4870,down 130; and Xiamen not available). 

Imported rapeseed oil: Imported rapeseed oil stays stable in price today, of which it settles at 6840-7120 yuan/tonne. (Fujian 6990; Guangdong not available; and Guangxi 6840) Crude oil prices bounced sharply on Thursday after U.S. President Donald Trump said Russia and Saudi Arabia planned to slash crude oil output. Rapeseed oil is in tight supplies now as oil mills keep low operation rates for rapeseed crush. Meanwhile, the demand for oils has been better recently, for food services are resuming operations and schools will gradually open across China this month, so soybean oil, palm oil and rapeseed oil stocks all keep decreasing, which support the rapeseed oil market. DCE crush margins for soybeans are considerable, which attracts Chinese importers to make purchases, and May-June soybean arrivals at ports are expected to increase significantly to 18 mln tonnes. Besides, catering businesses have been suffering a lot due to the quickly-spreading novel coronavirus. Overall, as outside market will be volatile due to the pandemic, rapeseed oil market is predicted to follow futures to fluctuate frequently. Participants are suggested to balance well between selling and buying.

Cottonseed oil: Cottonseed oil prices are stable today. Over the next two weeks, the operation rate in crushing mills is still low due to a soybean shortage. Besides, schools are about to reopen, and demand for oils at the low base remains good. Also, the cost of cottonseed oil stays high. Therefore, the cottonseed oil market is bolstered by these factors. In addition, U.S. President Donald Trump said he expects Saudi Arabia and Russia to announce a major oil production cut, and Brent crude soared as much as 47% overnight. But then Russia said Putin did not speak to Saudi Crown Prince, and Saudi also did not confirmed oil cut and said it was calling an emergency meeting of OPEC to deal with the issue. Oil prices shed some of their massive gains on the news and West Texas Intermediate (WTI) crude closed at $25.32 a barrel, with a rise of 24.67%. Although soybean oil on Dalian Commodity Exchange rises today, it actually stays at low levels before the close. And palm oil on DCE continues going down. On the spot market, soybean oil down by 20-70 yuan/tonne and palm oil down by 130 yuan/tonne, which drag down cottonseed oil market. It is likely that short-term cottonseed oil may follow the fluctuations, so buyers can wait and see.