Today (Apr. 9), the market for oilseeds and oils in China is shown as follows:

 

 

Imported soybean: The reference price for Argentine soybean is 4,400-4,500 yuan/tonne at port today. Soybeans are not in huge supply at Shandong port at present, and domestic soybean prices still stay high. In addition, the novel coronavirus is still an uncertainty in the market. These are all bullish to the market for imported soybeans. However, soybean arrivals at domestic ports could reach an average of 9.5 mln tonnes both in May and June. In a hybrid of the bull and the bear, the market for imported soybeans is predicted to stay stable in the short term.

 

Cottonseed: Cottonseed prices are stable with partial fluctuations of 0.01-0.03 yuan/kg. There is not much surplus gross cottonseed, and ranchers continue purchasing cottonseed, so traders have a strong will to raise price. But oil mills are cautious in purchasing cottonseed amid falls in the price of cottonseed meal and cotton linter, which drags down cottonseed market. Therefore, short-term cottonseed price may fluctuate to adjust.

 

 

Summary: US soybean futures closed further lower on Wednesday as traders squared positions ahead of a monthly USDA WASDE Report and due to the spread of the novel coronavirus. Malaysian palm oil futures rose for the third session on Wednesday on supply concerns, as the market forecast that Malaysia's biggest palm oil-producing state, Sabah, would not reopen its plantations that were shut previously. Oil futures also extend and expand gains on the Dalian Commodity Exchange (DCE) today. In the spot markets, soybean oil goes up 50-120 yuan/tonne and palm oil up 20-80 yuan/tonne, attracting some purchases at low prices. Soybean crush is predicted to decline further to 1.35 mln tonnes this week due to few soybean vessels arriving at ports, and the demand for packing oil and bulk oil is good, so soybean oil stocks have been falling to 1.15 mln tonnes, from a high level of 1.4 mln tonnes since the Lunar New Year. People in some regions like Tianjin, East China and Guangxi are waiting in line for picking up goods at present. Hence, the oil market is bolstered to go upward further. However, Chinese importers are still purchasing soybeans from Brazil and PNW, and gross crush margins for South American soybeans still stay high at 289-386 yuan/tonne for April-July shipments. Soybean arrivals at domestic ports could reach an average of 9.5 mln tonnes both in May and June. Moreover, mills in Rizhao and Huanghai have resumed soybean crush ahead of schedule. Domestic mills will gradually pick up operation rates later this month. In addition, the demand for vegetable oils also gets affected by the pandemic, and a slew of biodiesel companies have been in downtime due to weak crude oil prices. Therefore, it is suggested not not to be optimistic about the upward impetus of the oil market, but to prevent risks of frequent fluctuations. Participants can keep an eye on the monthly USDA WASDE Report tonight and monthly MPOB Report tomorrow.

 

Soybean oil: GB Grade I soybean oil is mainly priced at 5760-5900 yuan/tonne in domestic coastal areas, a rise of 50-120 yuan/tonne. (Tianjin traders 5840; Rizhao traders 5840; Zhangjiagang traders 5900; and Guangzhou traders 5760). 

 

Palm oil: RBD palm olein is mainly priced at 5130-5330 yuan/tonne in coastal areas, mostly up by 20-80 yuan/tonne. (Tianjin traders 5280-5330, up 20; Rizhao traders not available; Zhangjiagang traders 5220-5240, up 60; Guangzhou traders 5130-5140, up 80; and Xiamen not available). 

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 20-50 yuan at 7,060-7,190 yuan/tonne. (Fujian 7190, up 20; Guangdong and Guangxi not available.) Currently, rapeseed crush remains low and rapeseed oil is also in tight supplies. And many mills are idle due to soybean shortages. Meanwhile, the demand for packing oil and bulk oil has been good, reducing soybean oil, palm oil and rapeseed oil stocks in China. Hence, rapeseed oil market gets supported. However, Chinese importers have been scooping up on soybeans due to considerable crush margins on the DCE, so that soybean arrivals at domestic ports could reach an average of 9.5 mln tonnes both in May and June. Besides, the demand for vegetable oils has been affected, as catering businesses are crippling under the pandemic, and the demand for biodiesel also falls sharply due to weak crude oil prices. The outside markets are volatile due to the epidemic, so it is not suggested to be too optimistic about the upward impetus of rapeseed oil market. Overall, it is predicted to follow futures to fluctuate frequently, and participants need to remain cautious.

 

Cottonseed oil: Cottonseed oil rises by 50-300 yuan/tonne today. Market expects that Sabah government, Malaysia won’t reopen the plantations which are closed. Over the concerns about supply, palm oil on Bursa Malaysia Derivatives (BMD) staged three consecutive days of rise in spot soybean oil. And today, oils futures on Dalian Commodity Exchange (DCE) continue rising and gradually extend the gains. On the spot market, soybean oil up by 50-120 yuan/tonne and palm oil up by 20-80 yuan/tonne, seeing better trading in cottonseed oil. As factories successively raise price, the short-term trend is still strong. However, the operation rate in soyoil mills is predicted to slowly pick up in the second half of April. Moreover, global demand for vegetable oil is affected by the spread of the coronavirus pandemic and a large number of biofuel businesses also halt operation due to excessive low crude oil price, which will curb the upward space of oils market in China in certain degree. Buyers had better not chase up prices too high.