Today (May 7), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported Argentine soybean prices take on a weakening trend at ports today. Port soybean stocks have got a significant increase recently. Abundant crushing margins for imported soybeans on the DCE keep attracting Chinese importers to make purchases, so the monthly soybean arrivals at domestic ports are forecast to get near to 10 mln tonnes from May to July. On the trading side, downstream buyers lack of enthusiasm for buying as they still hold adequate stocks. 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 steadily rise by 0.01-0.02 CNY/kg today. The freight from Xinjiang to inland is still growing, and traders raise the price of cottonseed due to low inventory. As a result, the price of Xinjiang cottonseed delivered to inland continues increasing. However, the trading in cotton-by products goes not well, so inland oil mills suffer profit losses. In addition, they reduce the operation and are wary of purchasing cottonseed. Therefore, the price of Xinjiang cottonseed is predicted to fluctuate to adjust in a short term.
Oils:
Summary: The Trump administration blamed China for the novel coronavirus pandemic and threatened to impose additional tariffs on China. US soybean futures fell on Wednesday on concerns over relations between the two countries. But oil futures bounce on low-level buying on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 10-50 CNY/tonne, probably attracting some low-level purchases, but in tepid trading on the whole. Due to generous crushing margins, China’s soybean imports will probably hit 9.87 mln tonnes in May and 10 mln tonnes in June. Oil mills have quickly picked up operation rates and soybean crush is predicted to reach 1.82 mln tonnes this week and 2 mln tonnes next week; hence, soybean oil stocks will probably follow to rally. Moreover, Malaysia’s palm oil exports have been subdued by the pandemic and its April output might increase by 20% month on month, so palm oil stocks have started to get accumulating. With bearish fundamentals, the oil market is predicted to have limited upward space and to swing to the weak side. Buyers can keep light stockpiles.
Soybean oil: GB Grade I soybean oil is mainly priced at 5500-5630 CNY/tonne in domestic coastal areas, mostly up 20-50 CNY/tonne. (Tianjin traders 5500-5520; Rizhao traders 5550; Zhangjiagang traders 5630; and Guangzhou traders 5570).
Palm oil: RBD palm olein is mainly priced at 4610-4840 CNY/tonne in coastal areas, mostly up 10-50 CNY/tonne. (Tianjin traders 4790, up 50; Rizhao traders 4840, flat; Zhangjiagang traders 4710, up 10; Guangzhou traders 4610, up 10; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil prices are higher today, of which it settles up 40-50 CNY at 7070-7160 CNY/tonne in coastal regions (Fujian 7160, up 20; Guangdong not available; and Guangxi 7070). Rapeseed crush remains low amid tensions between China and Canada, and oil mills are just making delivery of contracts due to tight supplies of rapeseed oil, which help support rapeseed oil market. However, Chinese buyers are lured to scoop up on South American soybeans by handsome crushing margins, and monthly soybean arrivals are forecast tog get near to 10 mln tonnes from May to July. With high pressure from soybean imports, oil mills have resumed operation rates to normal and soybean crush is predicted to hit 1.82 mln tonnes this week and 2 mln tonnes next week; hence, soybean oil stocks will probably follow to rally. Meanwhile, India has extended the lockdown for two more weeks to May 17, so palm oil stocks have already got accumulating in producing countries on worries over the demand outlook. In addition, the demand in catering industry at home has not resumed to normal. Overall, rapeseed oil market is predicted to follow futures to swing in the short run and remain not optimistic in the mid-to-long term. Buyers are suggested to remain cautious at the moment.
Cottonseed oil: Cottonseed oil prices are stable today. The arrival of imported soybeans will reach 9.87 mln tonnes in May and likely be as high as 10 mln tonnes in June. With a sharp rise of operation rate in soyoil crushing mills, soybean crush is projected to close to 2 mln tonnes next week, so that soybean oil stocks may stop declining and start rising. Besides, Malaysian palm oil exports are weak amid the coronavirus pandemic and the production could be 20% higher than the previous month, which will see a inventory accumulation in producing area. Thus, this is bearish for bulk oils fundamentals, dragging down cottonseed oil trading. But less inventory of cottonseed coupled with rising freight, push the delivered price of Xinjiang cottonseed higher. Moreover, the operation rate among inland oil mills is low, and crushing plants in Xinjiang have many locked contracts. In addition, investors buy at low prices, leading oils on DCE today stop dropping and rebound. And spot soybean oil and palm oil up by 10-50 CNY/tonne. Accordingly, cottonseed oil market is bolstered by these factors. But the weak trend of bulk oils would not change in the near term and trend of cottonseed oil has yet to be optimistic, so buyers can buy on immediate demand.
(USD $1=CNY ￥7.09)
