Today (Apr. 26), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean quotes are stable with a weakening trend at ports today. Some 50,000 tonnes of commercial soybeans are expected to arrive at Shandong port late this month, which will add to supply in the market. Buyers now are mainly digesting stocks and not active purchasing; hence, the trading remains thin in the market and port traders are slow clearing stocks. Dominated by bearish factors, the market for imported soybeans is predicted to have downside potential in the short run.
Cottonseed: Cottonseed price steadily increases by 0.006-0.06 CNY/kg, while the delivery price in some factories decreases by 0.01 CNY/kg. As it will take a long time before the marketing of new cottonseed, traders are in no hurry to run out stocks, so cottonseed market is bolstered. But due to a poor market of oils and meals, crushing mills in Shandong are wary of purchasing cottonseed and prefer forcing price down. But the operation rate among inland oil mills is on a declining curve, dragging down cottonseed trading. It is predicted that short-term cottonseed price may continue fluctuating.
Oils:
Summary: US soybean futures ended 7.25 cents/bu lower on Friday amid the global coronavirus pandemic, but the decline was limited as China set down to make bulk purchases this week. Dalian Commodity Exchange is closed on Sunday today. The spot market is quiet with some quotes lower by 10-30 CNY/tonne, and the trading is little in the absence of trading on DCE. Soybean oil stocks are still on the downtrend. However, China keeps purchasing Brazilian soybeans as gross crushing margins still stay high at 286-385 CNY/tonne for April-July shipments, and monthly soybean arrivals at ports are predicted to average 9.8 mln tonnes from May to July. With the arrival of soybean vessels, soybean crush picks up by 5.8% to 1.67 mln tonnes this week and expected to reach 1.75 mln tonnes next week. The growth is smaller than forecast, but the overall uptrend is certain. The overall oil market is predicted to follow futures to fluctuate frequently with a weakening trend in the short run. And the mid-to-long trend is not bright now due to crippling catering business amid the pandemic and subdued demand for biofuels under low crude oil prices. Buyers are suggested to remain cautious in chasing after higher prices and to make appropriate replenishment on low forward basis.
Soybean oil: GB Grade I soybean oil is mainly priced at 5600-5750 CNY/tonne in domestic coastal areas, a partial decline of 10 CNY/tonne. (Tianjin traders 5660-5680 (DCE Y2009+170); Rizhao traders 5670; Zhangjiagang traders not available; and Guangzhou traders not available).
Palm oil: RBD palm olein is quoted at 4970 CNY/tonneby Tianjin traders, down by 30 CNY/tonne.
Imported rapeseed oil: Imported rapeseed oil prices are not available today. US soybean futures ended lower on Friday amid the pandemic, and domestic commodity exchanges are closed on Sunday today. Rapeseed oil prices are also not available in the spot markets. Crushing margins for South American soybeans have been decent on the DCE, so that monthly soybean arrivals are expected to reach an eye-popping average of 9.8 mln tonnes from May to July; hence, soybean crush will also gradually return to the normal level. Meanwhile, the demand from domestic catering services has not resumed to the normal and global demand for biofuels has also been subdued by a collapse in crude oil prices. These all drag down rapeseed oil market. However, domestic rapeseed crush remains at a low level amid tensions between China and Canada, and rapeseed oil is also in tight supply. Oil mills are mainly signing forward contracts, and weekly rapeseed oil stocks also declined by 7% to 177,000 tonnes in coastal regions last week. With numerous bearish factors, rapeseed oil prices may continue fluctuations and downtrend later and will have limited upward potential even if there are bounces. Buyers can stay on the sidelines at the moment.
Cottonseed oil: Cottonseed oil keeps steady with partial fluctuations of 50-150 CNY/tonne today. The coronavirus pandemic remains serve, raising market concerns. And U.S. soybeans closed down 7.25 cents/bu on Friday. As Dalian Commodity Exchange (DCE) closes on Sunday, spot oils are mostly not quoted today, while some quoted down 10-30 CNY/tonne. Besides, soybean will arrive at ports in huge quantity from May to July, leading the overall oils trend to be not optimistic. Accordingly, cottonseed oil price is dampened. But cottonseed is pricey due to low inventory, and the operation rate is very low, so several factories raise the price. In addition, the coronavirus pandemic has greatly hit the foodservices and the demand for biofuels plunges on account of gloomy crude oil. In light of this situation, the mid-term trend of oils market is not optimistic. Therefore, cottonseed oil price needs to be taken with caution.
(USD $1=CNY ￥7.08)
