Today (Apr. 30), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported U.S. soybean is quoted at 4100-4200 CNY/tonne at Shandong port today. Vessels with about 50,000 tonnes of U.S. soybeans and 15,000-20,000 tonnes of Brazilian soybeans have arrived at domestic ports recently, which has added to supply in the market. And China has increased U.S. soybean purchases, while still buying up on Brazilian crops due to handsome crushing margins. The monthly soybean arrivals at domestic ports will be huge from May to July, but downstream buyers still have adequate stocks and are not active making purchases. In addition, domestic soybean prices have also snapped off the uptrend, which is also 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，while the delivery price rises by 0.02 CNY/kg in individual regions. The charge of nationwide toll roads will be resumed since May 6th, so the freight from Xinjiang to inland edges up, so that the delivery price of Xinjiang cottonseed also goes up. But inland oil plants tend to force price down due to profit losses. And oil mills maintain the original purchasing price today but clinch no deal. 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. Due to the weakness in bulk oils and meals market, cottonseed price may fall slightly in later period. Buyers can maintain light stockpiles.
Oils:
Summary: US soybean futures closed higher on Thursday on easing lockdown measures and as President Donald Trump ordered meat processing plants to remain open. Oil futures also post gains on the Dalian Commodity Exchange today, driven by a huge rally in crude oil prices. In the spot markets, soybean oil increases by 20-30 CNY/tonne and palm oil up 50-80 CNY/tonne. Soybean oil is predicted to attract some low-level purchases and palm oil in tepid trading. However, gross crushing margins for Brazilian soybeans are high at 269-380 CNY/tonne, which attracts Chinese importers to keep on purchasing. 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. Oil mills have picked up operation rates to a normal level, and soybean oil stocks will increase again. In face of higher output and subdued demand amid the pandemic, accumulative palm oil stocks are under pressure in Southeast producing countries. With bearish fundamentals, the oil market is forecast to have limited upward impetus, but to fluctuate toward a weakening trend. Buyers out of stock can make small replenishment on the dips and remain cautious in chasing after excessive rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5520-5660 CNY/tonne in domestic coastal areas, mostly up 20-30 CNY/tonne. (Tianjin traders 5520-5530; Rizhao traders 5590; Zhangjiagang traders 5640-5660; and Guangzhou traders 5580).
Palm oil: RBD palm olein is mainly priced at 4750-4940 CNY/tonne in coastal areas, mostly up by 50-80 CNY/tonne. (Tianjin traders 4880, up 80; Rizhao traders 4940, up 40; Zhangjiagang traders 4780-4810, up 50; Guangzhou traders 4750-4770,up 60; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil prices are higher today, of which it settles up 20-30 CNY at 7060-7170 CNY/tonne in coastal regions (Fujian 7170, up 30; Guangdong not available; and Guangxi 7060). Rapeseed oil moves to the strong side. Oil mills now are just making delivery of previous contracts as they have not spot rapeseed oil for sales. On the production front, rapeseed crush remains low amid tensions between China and Canada. Rapeseed oil stocks keep declining, so are soybean oil and palm oil stocks. These are positive to the market. However, China has increased U.S. soybean purchases, while still buying up on Brazilian crops lured by handsome crushing margins. And the monthly soybean arrivals at domestic ports will be huge from May to July. Hence, oil mills will gradually pick up soybean crush, and soybean oil stocks will likely rally soon. Besides, palm oil output keep increasing at present in Southeast Asian producers, and domestic catering businesses have not resumed normal operations. Thus, there may be limited upward space for rapeseed oil prices. Overall, rapeseed oil market is predicted to follow futures to swing in the short run and remain not optimistic in the medium term. Buyers are suggested to remain cautious in chasing after higher prices.
Cottonseed oil: Cottonseed oil price mainly keeps steady with partial fluctuations of 20-50 CNY/tonne today. A rally in palm oil production but a collapse in demand amid the coronavirus pandemic, increases the pressure from stockpiling in Southeast Asia region. Under bearish fundamentals, there has no change in weakening oils trend overall, hitting market confidence. Thus, cottonseed oil price declines in some regions. Besides, cottonseed is pricey due to low inventory, and the operation rate is very low among inland oil plants. On the other hand, U.S. stay-at-home order was loosened and President Donald Trump ordered meat-processing plants to stay open, drawing a rise in U.S. soybean on Wednesday. Additionally, a sharp rebound in crude oil also pushed oils on Dalian Commodity Exchange higher. On the spot market, soybean oil up by 20-30 CNY/tonne and palm oil up by 50-80 CNY/tonne. And cottonseed oil price followed soybean oil to grow due to low inventory in several factories. Therefore, it is expected that short-term cottonseed oil price may fluctuate to adjust and be not optimistic in after-market. Buyers can wait and see.
(USD $1=CNY ￥7.06)
