Today (May 19), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported PNW soybeans are quoted steadily at 4100-4150 CNY/tonne at ports today. The rumor that local government would conduct an investigation into GM-soybean still hovers around the market, which underpins sales sentiment of port traders. However, the market is in dismal trading now, as downstream buyers lack of enthusiasm for buying. In addition, domestic soybean imports will are forecast to hit a monthly average of 10 mln tonnes from May to July, and China also bought about 1.2 mln tonnes of US soybeans last week, so that traders now tend to stay on the sideline. Dominated by bullish factors, the market for imported soybeans is predicted to keep firm in the short run.
Cottonseed: Cottonseed prices mainly keep steady and partly fluctuate by 0.02-0.05 CNY/kg today. The supply of cottonseed is gradually decreasing amid ranchers’ purchase. And it still takes long time before new cottonseed comes into market, raising traders’ selling reluctance. But the monthly arrivals of soybean will be close to 10 mln tonnes from May to July and soybean crush may reach a super high of 2 mln tonnes over the next two weeks, leading to a consecutive rise in inventory of soybean oil and soybean meal. Being depressed by this case, the trading in cotton by-products goes not well, so inland oil mills suffer from 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. Oil futures also post gains in early trading on the Dalian Commodity Exchange today, but soon afterwards, soybean oil swings to move lower and palm oil also significantly narrows down gains. In the spot markets, soybean oil steadily fluctuates by 10-20 CNY/tonne and palm oil partially up by 10-30 CNY/tonne, both in lukewarm trading. The first COVID-19 vaccine tested in the United States shows promising early results, economic activities are also resuming, and crude oil prices also rose sharply. In addition, Indonesian government intends to unveil around $190 mln of subsidies for biodiesel blending mandate and to hike its palm oil export duties. These together bolster domestic oil market to rebound. However, China bought about 1.2 mln tonnes of U.S. soybeans last week. Meanwhile, monthly soybean imports are expected to get near to 10 mln tonnes from May to July in China, and its weekly soybean crush is also forecast to hit 2 mln tonnes in the coming two weeks. Soybean oil stocks have increased by 3% to 870,000 tonnes as of last week, and China has bought a total of over 50 vessels of palm oil for deliveries in May-November. Besides, global catering businesses are still reeling under the pandemic. Overall, the oil market is predicted to have little upward space and to extend a relatively weakening trend. Buyers can keep light stockpiles before speculators focus on weather conditions in the US crop belt.
Soybean oil: GB Grade I soybean oil is mainly priced at 5420-5550 CNY/tonne in domestic coastal areas, partially fluctuating 10-20 CNY/tonne. (Tianjin traders 5420; Rizhao traders 5500; Zhangjiagang traders 5550; and Guangzhou traders 5420).
Palm oil: RBD palm olein is mainly priced at 4760-4940 CNY/tonne in coastal areas, a partial rise of 10-30 CNY/tonne. (Tianjin traders 4790, flat; Rizhao traders 4940, up 20; Zhangjiagang traders 4900, up 30; Guangzhou traders 4760, flat; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil price edges lower today, of which it settles down 10-20 CNY at 7140-7320 CNY/tonne in coastal regions (Fujian 7270; Guangdong not available; and Guangxi 7140).China’s soybean imports are forecast to hit a monthly average of nearly 10 mln tonnes from May to July, and soybean crush is likely to climb to 2 mln tonnes this week. And China has bought at least 50 vessels of palm oil for deliveries in May-November. Meanwhile, India has once again announced to extend its nationwide lockdown till May 31th. Besides, the pandemic is still affecting global catering services. Hence, rapeseed oil market comes under pressure. However, while there is no sign of a thaw between China and Canada, Australia has fueled tensions with China in recent weeks; hence, rapeseed supply in domestic market will remain in a tight outlook and rapeseed crush will still stay at a low level. Domestic oil mills now are busy making deliveries of rapeseed oil contracts which are signed previously, which also helps limited the decline in the market. Overall, rapeseed oil market is predicted to swing at the high level in the short run and remain not optimistic in the mid-to-long term. Buyers can wait at the moment.
Cottonseed oil: Cottonseed oil prices are stable mainly but up 50 CNY/tonne in several regions today. Oils futures on Dalian Commodity Exchange rose in morning session. As cottonseed is pricey due to little inventory and the operation rate still stays at a low level, cottonseed follow the rise in individual regions. But the monthly arrival of imported soybeans will reach up to nearly 10 mln tonnes from May to July, so soybean crush may increased to an extremely high level of 2 mln tonnes in the coming two weeks. Also, soybean oil stocks continue growing to 870,000 tonnes, with a rise of 3% from a week earlier. Such being this case, traders have not confidence in after-market of cottonseed oil. Thus, cottonseed oil market is depressed with tepid trade on the whole. Under the support of cost, the price among many cottonseed oil factories is still firm. But bulk oils are likely to fluctuate weakly in the near term, which may drag down cottonseed oil market. It is not optimistic about the overall market, so buyers can take a hand-to-mouth strategy.
(USD $1=CNY ￥7.09)
