Today (May 11), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported U.S. soybean is quoted at 3950-3970 CNY/tonne 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. Hence, port traders have lowered down quotes for a lack of confidence. Dominated by bearish factors, the market for imported soybeans is predicted to some downside potential in the near term.
Cottonseed: Cottonseed prices steadily increase by 0.01-0.04 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, cottonseed traders raise the price due to selling reluctance. However, the trading in cotton by-products goes not well, so inland oil mills suffer profit losses and are wary of purchasing cottonseed. Therefore, the price of Xinjiang cottonseed is predicted to fluctuate strongly in a short term.
Oils:
Summary: U.S. soybean futures closed further higher on Friday, as chief trade negotiators from China and the U.S. held phone talks to propel phase-one trade deal. Oil futures post moderate gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil partially goes up 10-20 CNY/tonne and palm oil mostly up 50 CNY/tonne, attracting some low-level purchases. With huge soybean imports in coming months, weekly soybean crush is forecast to get near to 2 mln tonnes in the next weeks. Weekly soybean oil stocks have increased by 4% to 845,000 tonnes in the week ending May 8 and palm oil stocks are also rising with higher import margins and more imports, while domestic oil market has entered into weak trading for two weeks. In addition, palm oil stocks in producing countries are also rising due to seasonally higher output and weak demand. In a myriad of bearish fundamentals, domestic oil market is predicted to have limited upward space in the near term and will probably fluctuate with a weakening trade overall. Buyers are suggested to replenish appropriately on the dips, rather than chase after excessively high prices.
Soybean oil: GB Grade I soybean oil is mainly priced at 5470-5650 CNY/tonne in domestic coastal areas, a partial rise of 10-20 CNY/tonne. (Tianjin traders 5470; Rizhao traders 5540; Zhangjiagang traders 5650; and Guangzhou traders 5510).
Palm oil: RBD palm olein is mainly priced at 4630-4900 CNY/tonne in coastal areas, mostly up 50-60 CNY/tonne. (Tianjin traders 4810, up 50; Rizhao traders 4900, up 60; Zhangjiagang traders 4780, up 50; Guangzhou traders 4630-4650,up 50; and Xiamen not available).
Rapeseed oil: Imported rapeseed oil prices are further higher today, of which it settles up 20-40 CNY at 7080-7210 CNY/tonne in coastal regions (Fujian 7210, up 40; Guangdong not available; and Guangxi 7080). As there is not a timetable for China and Canada to see a thaw, rapeseed has a tight supply outlook and thus remains low crush in China. With a backlog of contracts to fulfill in hand and out of spot goods, oil mills now are busy making delivery with existing stocks. Weekly rapeseed oil stocks decreased by 4% to 178,000 tonnes last week. Both give support to the market. However, monthly soybean arrivals are forecast to get near to 10 mln tonnes from May to July, so that oil mills will probably pick up weekly soybean crush to near 2 mln tonnes in coming two weeks, and weekly soybean oil stocks have increased by 4% to 845,000 tonnes. Meanwhile, palm oil stocks are accumulating in top producing countries, while low crude oil prices have subdued the demand for biofuels. These may curb rises in rapeseed oil prices. 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 in chasing after higher prices.
Cottonseed oil: Cottonseed oil prices are mainly stable but down 50 CNY/tonne in individual regions today. It sees huge arrival of soybeans at ports. With a sharp rise of operation rate in soyoil crushing mills, soybean oil inventories are likely to 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. In addition, oils on Dalian Commodity Exchange moderately rise today. On the spot market, soybean oil partly up by 10-20 CNY/tonne and palm oil mostly up by 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 ￥7.08)
