Today (May 6), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported U.S. soybean is quoted at 4000 CNY/tonne at Shandong port today, down 100 CNY/tonne from that before the May Day holiday. Port soybean stocks get a sharp increase recently. In the meantime, China has increased U.S. soybean purchases, while still buying up on Brazilian crops due to handsome crushing margins, hence, 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, so the trading remain weak at present. 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 rise by 0.02-0.06 CNY/kg today. The charge of nationwide toll roads has been resumed, so the freight from Xinjiang to inland goes up. Besides, traders raise the price of cottonseed due to low inventory. As a result, the price of Xinjiang cottonseed increases. However, bulk oils and meals all decline with little trading in cotton-by products, so inland oil mills suffer profit losses. In addition, they reduce the operation and are wary of purchasing cottonseed. Therefore, the Xinjiang cottonseed price is predicted to fluctuate to adjust in a short term. Participants can keep close eyes on the freight from Xinjiang to inland.
Oils:
Summary: Trump administration floated the idea of imposed new additional tariffs on China to punish for its role in the pandemic outbreak, in addition to dismal data in soybean export report, so US soybean futures fell moderately by 2.5 cents during the May Day holiday. Oil futures also move lower on the Dalian Commodity Exchange today. In the spot markets, soybean oil mostly goes down 50-60 CNY/tonne and palm oil down 120-170 CNY/tonne. The trading is predicted to remain tepid, but there may be some purchases on low forward basis. Soybean oil stocks have fallen to near 810,000 tonnes in the week ending May 1, but are forecast to get increased again with higher soybean imports and growing soybean crush. Soybean imports are expected to reach 9.87 mln tonnes in May and and get near to 10 mln tonnes in June. Meanwhile, soybean crush rose 6% to 1.78 mln tonnes last week and is predicted to hit 1.82 mln tonnes and 2 mln tonnes in the next weeks, respectively. Besides, India has extended the lockdown for two more weeks to May 17, so palm oil stocks have already got accumulated in producing countries on worries over the demand outlook. Overall, the oil market is predicted to maintain a weakening trend due to bearish fundamentals, and buyers can stay on the sidelines or buy on immediate demand.
Soybean oil: GB Grade I soybean oil is mainly priced at 5470-5580 CNY/tonne in domestic coastal areas, mostly down 50-60 CNY/tonne. (Tianjin traders 5470; Rizhao traders 5530; Zhangjiagang traders 5580; and Guangzhou traders 5500).
Palm oil: RBD palm olein is mainly priced at 4590-4820 CNY/tonne in coastal areas, mostly down 120-170 CNY/tonne. (Tianjin traders 4720-4750, down 150; Rizhao traders 4820, down 150; Zhangjiagang traders 4680, down 120; Guangzhou traders 4590-4600,down 170; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil prices decline today, of which it settles down 30-50 CNY at 7010-7120 CNY/tonne in coastal regions (Fujian 7120, down 50; Guangdong not available; and Guangxi 7010). The demand in catering industry at home has not resumed to normal, so in the week ending May 1st, rapeseed oil stocks in coastal regions rose 5% to 185,000 tonnes. Besides, 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 have picked up operation rates. In addition, palm oil output is also growing currently in Southeast Asian producing countries. However, rapeseed crush remains low due to tight supplies as there is not a schedule for a thaw between China and Canada, and oil mills now are just making delivery of previous contracts as they have no spot rapeseed oil for sales, which help limit the decline in rapeseed oil prices. Overall, rapeseed oil market is predicted to follow futures to swing with a weakening trend in the short run and remain not optimistic in the medium term. Buyers can stay on the sidelines at present.
Cottonseed oil: Cottonseed oil price declines by 20-50 CNY/tonne today. U.S. President Donald Trump takes aim at China as the source of COVID-19 and threatens new tariffs on Beijing in retaliation for the pandemic. Due to the poor export, U.S. soybeans edged down 2.5 cents during the holiday. Also, oils on Dalian Commodity Exchange moves lower today. In the spot market, soybean oil mostly falls by 50-60 CNY/tonne and palm oil mostly down by 120-170 CNY/tonne. Under bearish fundamentals of oils, cottonseed oil trading is dragged down and the price declines. However, the price of Xinjiang cottonseed to inland increases, and the operation rate among oil mills is low. Nevertheless, the price declines of Xinjiang cottonseed oil are relatively small as crushing plants in Xinjiang have many locked contracts. Accordingly, the trend of cottonseed oil will be not optimistic, so buyers can take a wait-and-see strategy.
(USD $1=CNY ￥7.07)
