Today (May 20), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported PNW soybeans are quoted steadily at 4100 CNY/tonne at ports today. Port traders are quoting steadily, as the market is affected by a rumor about an investigation into GM-soybeans. However, the market is in dismal trading now, as downstream buyers lack of enthusiasm for buying. Moreover, China is likely to continue US soybean purchases, and Brazil’s exports of agriculture products still stay strong. In addition, domestic soybean imports will are forecast to hit a monthly average of 10 mln tonnes from May to July, so some traders tend to stay on the sideline. In a hybrid of the bull and the bear, the market for imported soybeans is predicted to keep firm in the short run.
Cottonseed: Cottonseed prices mainly keep steady and fluctuate by 0.01 CNY/kg in several regions 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. And the high-priced cottonseed is mainly purchased by ranchers. But the monthly arrivals of soybean will be close to 10 mln tonnes from May to July and soybean crush may hit 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, the trading volume is limited, and cottonseed price is predicted to fluctuate to adjust in a short term.
Oils:
Summary: U.S. soybean futures closed lower on Tuesday on smooth spring crop planting, as 53% of the nation’s soybean acreage was planted by May 17, compared to 16% last year and 38% of the 5-year average. Oil futures swing to inch higher on the Dalian Commodity Exchange today. In the spot markets, soybean oil mostly goes up 10-30 CNY/tonne and palm oil up 10-80 CNY/tonne, both in lukewarm trading. Indonesia announced to unveil subsidies for B30 blending mandate, and Malaysia is also set to restart B20 in September. Meanwhile, Indian buyers have resumed purchases of Malaysian palm oil due to discounted prices. Palm oil has been a relatively strong performer recently, which also bolsters soybean oil. However, China bought about 1.2 mln tonnes of US soybeans last week, and some buyers are still asking prices. Soybean imports are forecast to hit a monthly average of nearly 10 mln tonnes from May to July, so oil mills have to maintain weekly soybean crush high at a level of around 2 mln tonnes in coming few weeks, and soybean oil stocks will also follow to extend an uptrend. The demand for soybean oil has been dismal for weeks as global catering services are still crippling under the pandemic, which is also a curb on the oil market. Overall, short-term oil market is predicted to have little upward space and fluctuate to maintain a weak pattern. Buyers are suggested to keep light stockpiles.
Soybean oil: GB Grade I soybean oil is mainly priced at 5440-5540 CNY/tonne in domestic coastal areas, mostly up 10-30 CNY/tonne and a partial decline of 10 CNY/tonne. (Tianjin traders 5460-5470; Rizhao traders 5480; Zhangjiagang traders 5540; and Guangzhou traders 5440).
Palm oil: RBD palm olein is mainly priced at 4800-5020 CNY/tonne in coastal areas, up 10-80 CNY/tonne. (Tianjin traders 4880, up 60; Rizhao traders 5020, up 80; Zhangjiagang traders 4930, up 30; Guangzhou traders 4800-4810,up 10; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil price edges lower today, of which it settles down 10-30 CNY at 7140-7270 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. 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. Spot rapeseed oil is in tight supplies, which limits declines in its prices. Overall, short-term rapeseed oil market is predicted to follow futures to fluctuate to adjust, and its outlook maintains to be seen with caution. Buyers can wait at the moment.
Cottonseed oil: Cottonseed oil prices are stable with partial fluctuations of 50 CNY/tonne today. Oils on Dalian Commodity Exchange fluctuate to rise slightly today, and spot soybean oil mostly up by 10-30 CNY/tonne and spot palm oil up by 10-80 CNY/tonne. 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 will be trending up in the coming weeks. Such being this case, traders have not confidence in after-market of cottonseed oil. Thus, cottonseed oil market is depressed with partial falls. Under the support of cost, many cottonseed oil factories prop up price. But bulk oils are still weak overall, which may drag down cottonseed oil market. Buyers can take a hand-to-mouth strategy.
(USD $1=CNY ￥7.1)
