Today (Apr. 29), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported Argentine soybean is quoted slightly weaker at port today. Vessels loaded 50,000 tonnes of soybeans have arrived at Shandong port, which will add to trading supplies in the market. And China continues buying up on Brazilian soybeans due to generous crushing margins, and now it has also increased US soybean purchases. The monthly soybean arrivals at domestic ports will be overwhelming from May to July, of which May soybean imports are forecast to be 9.87 mln tonnes. Downstream buyers still have adequate stocks, so port traders are not confident in propping up prices, which is negative to the market. Dominated by bearish factors, the market for imported soybeans is predicted to have downside potential in the short run.
Cottonseed: Cottonseed prices keep steady today. The charge of nationwide toll roads will be resumed since May 6th, so the freight from Xinjiang to inland edges up. But inland oil plants tend to force price down due to profit losses and maintain the original purchasing price, and the operation rate is low at the moment. Thus, these are unfavorable for Xinjiang cottonseed market. As it will take a long time before the marketing of new cottonseed, traders are loath to sell cottonseed at a big discount and still want to prop up price. Nevertheless, cottonseed market remains flat today as a result of limitation in purchase and sale. Due to the poor performance in bulk oils and meals, cottonseed price may fall slightly. Buyers can maintain light stockpiles.
Oils:
Summary: US soybean futures closed further lower on Tuesday, but US soyoil futures edged up on widening of positions by traders. And oil futures moderately move higher on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil mostly go up by 10-50 CNY/tonnes. The spot market is predicted to be in tepid trading and attract some purchases at low forward basis. Soybean oil and palm oil stocks both stay at relative low levels. In addition, now some Canadian rapeseed vessels are not smooth in unloading in South China. These all provide support to the market. However, domestic oil market is in weaker trading now after a wave of huge purchases, and Indonesian exporters have sharply lowered down quotes for palm oil due to an outlook for higher production. Meanwhile, gross crushing margins for Brazilian soybeans are high at 269-380 CNY/tonne for April to July deliveries, and the monthly average of soybean arrivals at ports is likely to reach an overwhelming level of 9.8 mln tonnes from May to July in China, so soybean crush is expected to reach 1.75 mln tonnes this week and soybean oil stocks may rally amid dismal demand. Overall, the oil market is forecast to have limited upward potential and to fluctuate with a weakening trend in spite of this wave of bounces.
Soybean oil: GB Grade I soybean oil is mainly priced at 5520-5650 CNY/tonne in domestic coastal areas, mostly up 20-40 CNY/tonne. (Tianjin traders 5520; Rizhao traders 5580; Zhangjiagang traders 5650; and Guangzhou traders 5570).
Palm oil: RBD palm olein is mainly priced at 4710-4870 CNY/tonne in coastal areas, mostly up by 10-50 CNY/tonne. (Tianjin traders 4820, up 50; Rizhao traders 4870, up 10; Zhangjiagang traders 4750, up 30; Guangzhou traders 4710,up 50; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil prices are mixed today, of which it fluctuates ups and downs by 10-20 CNY at 6940-7140 CNY/tonne in coastal regions (Fujian 7140, down 10; Guangdong not available; and Guangxi 6940). Abundant crushing margins for South American crops continue to attract Chinese importers make purchases, and the average soybean arrivals at domestic ports are forecast to reach 9.8 mln tonnes per month from May to July. With arrivals of soybean vessels at ports, soybean crush is expected to reach 1.75 mln tonnes in coming two weeks. The COVID-19 has hit global catering industry hard, and weak crude oil prices have also caused a dim outlook in demand for biofuels. These together weigh on rapeseed oil market. However, there is no timetable as to when China and Canada will enter into a detente, and it take much time to clear Canadaian canola vessels at southern customs, so rapeseed crush still remains at a low level. Meanwhile, rapeseed oil, soybean oil and palm oil stocks all keep declining, which now gives support to the market. Negative factors gaining the upper hand, rapeseed oil is predicted to follow futures to fluctuate to downside in the short term and will have limited upward potential even if there are bounces. Buyers are suggested to remain cautious in chasing after higher prices.
Cottonseed oil: Cottonseed oil price mainly keeps steady with partial decreases of 50-150 CNY/tonne today. The demand for soybean oil obviously slows than before, and global demand in foodservices is also worrisome amid the coronavirus pandemic. As a result of collapse in demand for biofuels amid gloomy crude oil, the overall market of bulk oils will still fluctuate in a weak trend, which hits market confidence. In this case, cottonseed oil prices decline in some regions. Besides, the freight goes up, dampening price of Xinjiang cottonseed oil. But cottonseed is pricey due to low inventory, and the operation rate is very low among inland oil plants. Additionally, oils on DCE moderately rise today, and spot soybean oil and palm oil mostly up by 10-50 CNY/tonne. This bolsters price to be stable tentatively. And it is expected that short-term cottonseed oil price may fall back with fluctuations. Buyers can wait and see.
(USD $1=CNY ￥7.07)
