Today (May 12), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported U.S. soybean prices are weakening at ports today. Port soybean stocks have got a significant increase recently. Brazil’s soybean shipments heading for China totaled 3.93 mln tonnes as of May 11, so May shipments may reach 10 mln tonnes for a third consecutive month at such rates. 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. Overall, the market for imported soybeans is predicted to some downside potential in the near term due to dismal demand.
Cottonseed: Cottonseed prices keep steady 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, raising traders’ selling reluctance. But large quantity of imported soybean has just begun to arrive at ports successively, which will last until July. And soybean crush may almost equal to 2 mln tonnes this and next week. In addition, bulk oils and meals all decline today, and the trading in cotton by-products goes not well, so inland oil mills suffer profit losses and are wary of purchasing cottonseed. Therefore, cottonseed price is predicted to fluctuate to adjust in a short term.
Oils:
Summary: U.S. soybean futures closed further higher on Monday. Traders said that China bought at least four vessels or about 240,000 tonnes US soybeans on Monday, and a Chinese state-owned firm was seeking quotes of up to 20 vessels, July-November shipments. Oil futures fall on Dalian Commodity Exchange today on bearish fundamentals. In the spot markets, soybean oil goes down 20-60 CNY/tonne and palm oil down by 50-90 CNY/tonne, both in tepid trading. Saudi Arabia announced to reduce its crude oil production by an extra 1 million barrels per day beginning in June India's Ministry of Commerce and Industry has suspended 39 import licenses for refined palm oil, a move that will affect the demand for palm oil. And according to a report by Malaysian Palm Oil Board, Malaysia's palm oil end-stocks in April jumped 18% to 2.05 million tonnes. In addition, Brazil’s soybean shipments heading for China totaled 3.93 mln tonnes as of May 11, so May shipments may reach 10 mln tonnes for a third consecutive month at such rates. Numerous vessels loaded with soybeans will arrive in China during May-July, so that mills are expected to pick up weekly soybean crush to nearly 2 mln tonnes both this week and next week. Weekly soybean oil stocks have increased by 4% to 845,000 tonnes in the week ending May 8, the demand for oils has turned weak in recent two weeks and oil oil mills have slowed down delivery; hence, the oil market is under pressure. Overall, the oil market is predicted to maintain a weakening trend, and buyers can keep light stockpiles at the moment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5410-5550 CNY/tonne in domestic coastal areas, a decline of 20-60 CNY/tonne. (Tianjin traders 5410; Rizhao traders 5450; Zhangjiagang traders 5550; and Guangzhou traders 5430-5450).
Palm oil: RBD palm olein is mainly priced at 4540-4760 CNY/tonne in coastal areas, mostly down 50-90 CNY/tonne. (Tianjin traders 4710-4720, down 60; Rizhao traders 4760, down 90; Zhangjiagang traders 4690, down 50; Guangzhou traders 4540-4560, down 70; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil prices go down today, of which it settles down 20-30 CNY at 7010-7180 CNY/tonne in coastal regions (Fujian 7180, down 30; Guangdong not available; and Guangxi 7010). Mills are under pressure with huge soybean imports from May to July, so that weekly soybean crush is forecast to climb toward 2 mln tonnes in coming weeks. And according to a report by Malaysian Palm Oil Board, Malaysia's palm oil end-stocks in April jumped 18% to 2.05 million tonnes, sending palm oil futures to sharply drop on the Bursa Malaysia Derivatives Exchange. These act as a drag on domestic rapeseed oil market. However, rapeseed crush remain low amid tensions between China and Canada, and rapeseed oil spots are also in tight supplies; hence, rapeseed oil market is more resilient than soybean oil and palm oil markets. Overall, short-term rapeseed oil market may follow futures to keep range-bound downward to adjust, and buyers can stay on the sidelines.
Cottonseed oil: Cottonseed oil prices are mainly stable but down 200 CNY/tonne in some regions today. The Ministry of Commerce of India declared on Monday to suspend 39 licenses issued for import of refined palm oil, which would affect the demand for palm oil. And Malaysian palm oil stocks steeply increased by 18% to 2.05 mln tonnes, according to MPOB report. In addition, the monthly arrival of soybeans will reach up to nearly 10 mln tonnes from May to July, seeing huge imports. And soybean oil inventories have stopped falling and rose to 845,000 tonnes, up nearly 4% than a week earlier. However, the demand for oils is poor in recent two weeks, and oils price moves lower under the pressure from slowing delivery. In this case, oils on Dalian Commodity Exchange stop rising and fall back today. On the spot market, soybean oil down by 20-60 CNY/tonne and palm oil down by 50-90 CNY/tonne, weighing down cottonseed oil market. But cottonseed is pricey due to little inventory and crushing mills have many outstanding contracts. Accordingly, cottonseed oil market is also bolstered. But the weak trend of spot 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)
