Today (Apr. 27), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported Argentine soybean is quoted at 4200-4270 CNY/tonne at port today, down 100 CNY/tonne from yesterday. Vessels loaded 50,000 tonnes of soybeans have arrived at Shandong port, which will add to trading supplies 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 prices are stable today. 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 bulk 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 the demand for cottonseed. It is predicted that short-term cottonseed price may continue fluctuating.
Oils:
Summary: US soybean futures ended lower last Friday due to demand uncertainty stemming from the global coronavirus pandemic and as farmers were harvesting and selling their crops at full swing in South America. Oil futures all post losses on the Dalian Commodity Exchange today. In the spot markets, soybean oil partially drops by 30-100 CNY/tonne and palm oil down 50-150 CNY/tonne. The trading is predicted to be tepid for spot contracts, but there will still be some purchase on low forward basis. Crude oil futures are less likely to reverse the weakening trend, as worldwide oil storage is filling rapidly on the collapse in demand from the coronavirus pandemic. In addition, gross crushing margins for Brazilian soybeans are high at 259-378 CNY/tonne for April to July shipments, attracting Chinese importers to continuing purchasing. China bought a total of 22 cargoes of Brazilian crops last Thursday and Friday. Meanwhile, the monthly average of soybean arrivals at ports is likely to reach an overwhelming level of 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. Although weekly soybean oil stocks declined by 7.4% to 840,000 tonnes and palm oil down 13% to 530,000 tonnes, and people even rush up to purchase oils in northeast China, the supply will not get interrupted as oil mills will soon sharply pick soybean crush. In addition, ongoing COVID-19 and weak crude oil prices also exist as bearish factors. Overall, the oil market is predicted to continue its weakening trend with fluctuations, and buyers can maintain light stocks for the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5530-5650 CNY/tonne in domestic coastal areas, a partial decline of 30-100 CNY/tonne. (Tianjin traders 5530 (DCE Y2009+170); Rizhao traders 5600; Zhangjiagang traders 5650; and Guangzhou traders 5560).
Palm oil: RBD palm olein is mainly priced at 4680-4850 CNY/tonne in coastal areas, mostly down by 50-150 CNY/tonne. (Tianjin traders 4850, down 150; Rizhao traders not available; Zhangjiagang traders 4700-4750, down 50; Guangzhou traders 4650-4680,down 70; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil price declines today, of which it settles down 40-60 CNY/tonne at 6860-7010 CNY/tonne in coastal regions (Fujian 7010, down 40; Guangdong and Guangxi not available). China continues buying up on Brazilian soybeans due to generous crushing margins, and now it has also increased US soybean purchases. The monthly average of soybean arrivals at ports is likely to reach an overwhelming level of 9.8 mln tonnes from May to July, so soybean crush will gradually pock up in coming weeks. In addition, Malaysia is seeing higher palm oil output and it has also delayed the nationwide rollout of the B20 mandate, and global demand for edible oils have been hit with the extension of the nationwide lockdown in India; hence, there is growing pressure in palm oil supply and demand in producing countries. However, domestic rapeseed crush remains at a low level amid tensions between China and Canada. In the week ending April 24th, weekly rapeseed oil stocks declined by 7% to 177,000 tonnes in coastal regions and soybean oil stocks fell by 7.4% to 840,000 tonnes. These together help limit decline in rapeseed oil prices. Rapeseed oil market is predicted to follow futures to fluctuate with a weakening trend in the short term and remain to be seen in the medium trend. Buyers can stay on the sidelines at the moment.
Cottonseed oil: Cottonseed oil price keeps steady today. There still exists uncertainty in demand for U.S. soybeans amid the coronavirus pandemic, and the harvest and marketing of South American soybeans will be conducted intensively. Consequently, U.S. soybeans closed lower last Friday. While today, oils on Dalian Commodity Exchange (DCE) fall back. On the spot market, soybean oil partly down by 30-100 CNY/tonne and palm oil mostly down by 50-150 CNY/tonne, which drags down cottonseed oil trading. But cottonseed is pricey due to low inventory, and the operation rate is very low among inland oil plants, so the price is stable tentatively. In addition, given that the operating rate among soyoil mills is about to rise sharply, it will not see the short supply. Moreover, the overall market of bulk oils will still fluctuate in a weak trend as a result of the fast-spreading COVID-19 and gloomy crude oil. Therefore, cottonseed oil price needs to be taken with caution.
(USD $1=CNY ￥7.07)
