Today (May 9), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported Argentine soybean prices still take on a weakening trend at ports today. Port soybean stocks have got a significant increase recently, and monthly soybean imports are forecast to average at nearly 10 mln tonnes from May to July. But soybean market is in weak trading now, as downstream buyers hold adequate stocks and lack of enthusiasm for buying. However, traders are still concerned about soybean shipments in Brazil as coronavirus pandemic is still severe in this country. In the near term, the market for imported soybeans is predicted to keep steady with a weakening trend.
Cottonseed: Cottonseed prices mainly stay stable but up by 0.01 CNY/kg in several regions today. Some traders are implementing previous contract, so the supply of cottonseed is gradually decreasing. And it still takes long time before new cottonseed comes into market. Hence, all the factors give traders confidence to raise price. Consequently, cottonseed price rises in individual regions. However, the trading in cotton by-products goes not well, so inland oil mills suffer profit losses. In addition, they reduce the operation rate and are wary of purchasing cottonseed. Therefore, the price of Xinjiang cottonseed is predicted to fluctuate to adjust in a short term.
Oils:
Summary: U.S. soybean futures closed further higher on Friday on purchases by China and on concerns over crop weather, and domestic commodity exchanges are closed on Saturday today. In the spot markets, soybean oil steadily increases by 10-20 CNY/tonne and palm oil prices are mostly not available with a partial rise of 20 CNY/tonne, probably attracting some low-level purchases, but in tepid trading on the whole. Weekly soybean crush slightly declines to 1.75 mln tonnes this week, but it is forecast to hit a very high level of 1.98-2 mln tonnes in coming two weeks as monthly soybean imports will get near to 10 mln tonnes from May to July; hence, soybean oil stocks will probably follow to rally again. Meanwhile, Chinese Vice Premier Liu He held a phone talk with U.S. trade representatives on Friday, so China is likely to continue U.S. soybean purchases. In addition, palm oil stocks have been increasing in top producing countries, while low crude oil prices have led to a decline in demand for biofuels. Domestic oil market rebounds in the short term, bolstered by a rise in US soybean futures, but it is predicted to keep fluctuating with a downtrend overall. Buyers can keep light stockpiles in the near term.
Soybean oil: GB Grade I soybean oil is mainly priced at 5500-5640 CNY/tonne in domestic coastal areas, a partial rise of 10-20 CNY/tonne. (Tianjin traders 5500; Rizhao traders 5530; Zhangjiagang traders not available; and Guangzhou traders 5550).
Palm oil: RBD palm olein is offered higher by 20 CNY at 4800 CNY/tonne by Tianjin traders.
Rapeseed oil: U.S. soybean futures closed higher on Friday, as Chinese Vice Premier Liu He held a phone talk with U.S. trade representatives and China had resumed U.S. soybean purchases. Domestic futures exchanges are closed on Saturday today, and no spot prices are available in the rapeseed oil markets. Rapeseed oil stocks increase by 50% to 18,000 tonnes in coastal regions this week, and monthly soybean imports are forecast to average at nearly 10 mln tonnes from May to July. In face of huge soybean imports, oil mills will raise weekly soybean crush to a very high level of nearly 2 mln tonnes in coming two weeks, so soybean oil stocks will probably mount higher again very soon. Meanwhile, palm oil production will also be increasing seasonally in Southeast Asian producers, while the demand for biofuels has declined due to low crude oil prices. Such bearish fundamentals are together weighing on rapeseed oil market. However, rapeseed crush still remains low due to tensions between China and Canada, and rapeseed oil spots are also in tight supplies, which now support the market. Overall, rapeseed oil market is predicted to fluctuate with slight declines and will have limited upward impetus even if there are bounces. Buyers can stay on the sidelines at the moment.
Cottonseed oil: Cottonseed oil prices are stable today. It sees huge arrival of soybeans at ports. 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, market expects that Malaysian palm oil stocks in late April may reach a high level of 2 mln tonnes. Thus, this is bearish for bulk oils fundamentals, dragging down cottonseed oil trading. But cottonseed price is high due to supply shortages, and crushing plants in Xinjiang have many outstanding contracts amid the low operation rate. Besides, a consecutive rebound in U.S. soybeans leads spot soybean oil to steadily rise by 10-20 CNY/tonne today. 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 ￥7.08)
