Today (Apr. 7), the market for oilseeds and oils in China is shown as follows:

 

 

Imported soybean: The reference price for Argentine soybean is 4400-4500 yuan/tonne at port today. Port soybeans are not in huge supplies at present, and domestic soybean prices also keep strengthening. In addition, the novel coronavirus is still an uncertainty in the market. These are all bullish to the market for imported soybeans. However, due to handsome crush margins, Brazil’s soybean shipment heading for China hit a single-month record high to reach 10 mln tonnes in March, and April shipment is also predicted to get near to that quantity. Calculated by such shipments and normal shipping time, soybean cargoes arriving at domestic ports will hit an average of 9.5 mln tonnes both in May and June, according to latest data by Cofeed. Dominated by bullish factors, the market for imported soybeans is predicted to keep firm in the short term.

 

Cottonseed: Cottonseed prices are in downward trend, with a decrease of 0.04-0.08 yuan/kg. And cottonseed price continues to adjust weakly. Besides, oil mills are wary of purchasing cottonseed and tend to force price down, depressing cottonseed price. But cottonseed traders keep propping up price as pastures still make replenishment amid the rigid demand, which limits the price declines. Therefore, short-term cottonseed price may fluctuate to adjust affected by falling cottonseed meal price.

 

 

Summary: US soybean futures edged higher on Monday as there were signs that drought conditions in South America could erode Brazil’s soybean output. And expectations for an agreement to cut oil output among main producing countries have made crude prices swing to rebound since last week. Oil futures all rise on the Dalian Commodity Exchange today as investors cover positions in oils and square positions in meals. In the spot markets, soybean oil and palm oil go up by 70-110 yuan/tonne, attracting some low-level purchases. Soybean crush fell by 2.6% to 1.44 mln tonnes in the week ending April 3rd due to small soybean arrivals at ports, in addition to good demand for packing oil and bulk oil, so soybean oil stocks declined further more by 8.36% to 1.15 mln tonnes. There are lines waiting for picking up goods in many regions at present, especially in Guangxi, where soybean oil is in tight supply. Hence, oil market is pushed to go strengthening. However, Chinese importers are still purchasing soybeans from Brazil and PNW, and gross crush margins for South American soybeans still stay high at 280-359 yuan/tonne for April-July shipments, so mills will again pick up operation rates in the near futures. Meanwhile, there are more than 360,000 infections of the COVID-19 in the United States now, and India has also declared a 21-day lockdown nationwide in a bid to constrain the coronavirus. The market is forecast a decline of 500,000 tonnes in the demand for vegetable oils in India during the lockdown. The global environment is now a big concern, which will also to some extent curb the upward space of oil market in China. The oil market may see short-term bounces bolstered by a huge rise in crude oil prices, but it will fluctuate frequently in a hybrid of the bull and the bear. Buyers are suggested to make appropriate replenishment on the dips, and not to chase after excessively huge rises. 

 

Soybean oil: GB Grade I soybean oil is mainly priced at 5600-5770 yuan/tonne in domestic coastal areas, a rise of 70-110 yuan/tonne. (Tianjin traders 5640-5650; Rizhao traders 5770; Zhangjiagang traders 5700; and Guangzhou traders 5600). 

 

Palm oil: RBD palm olein is mainly priced at 4930-5140 yuan/tonne in coastal areas, mostly up by 80-110 yuan/tonne. (Tianjin traders 5140,up 110; Rizhao traders not available; Zhangjiagang traders 5040, up 80; Guangzhou traders 4930-4950,up 80; and Xiamen not available). 

 

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 90-110 yuan at6,930-7,130 yuan/tonne. (Fujian 7130; Guangdong not available; and Guangxi 6930, up 90) Expectations for an agreement to cut oil output among main produing countries have made crude prices swing to rebound since last week. And China have not resumed the export qualifications of two Canadian canola businesses that have been suspended due to quality problems were serious since 2019, according to a release on the website of China’s Foreign Ministry of Affairs last Friday. Moreover, mills have been keeping low operation rates for rapeseed crush, and spot rapeseed oil has been in tight supplies. In the week ending April 3rd, rapeseed oil stocks fell 9.9% from previous week to 253,900 tonnes. Besides, many mills are also idle for a lack of soybeans, for soybean arrivals at ports are small in April. In the week ending April 3rd, soybean crush only totaled 1.44 mln tonnes, and soybean oil stocks declined 9% to 1.15 mln tonnes. In addition, catering businesses are resuming work, and schools will also open gradually this month; hence, the demand for oils has been good recently, which is also a support to the market. However, outside market are volatile now due to the novel coronavirus across the globe, of which the United States has reported over 300,000 confirmed cases so far. Rapeseed oil is still unable to tightly grasp the upwards trend, and may follow futures to fluctuate frequently. Participants need to balance buying and selling well.

 

Cottonseed oil: Cottonseed oil rises by 50 yuan/tonne today. Due to an expectation of oil producing countries coming to an agreement in production cut, crude oil fluctuates to rebound. And oils on DCE also rise on account of the profit taking by buying oils and selling meals. On the spot market, soybean oil and palm oil up by 70-110 yuan/tonne, seeing better trading in cottonseed oil, so the price goes up. In addition, the confirmed COVID-19 cases in U.S. have reached over 360,000 people. And the coronavirous outbreak in India is emerging. Moreover, market expects that the demand for vegetable oil will slide by around 500,000 tonnes during the 21 days of lockdown. Over the worrisome overall situation around the world, the upward space of oils prices in China will be curbed in certain degree. With a surge in crude oil, cottonseed oil will also follow soybean oil to rally in the near term.