Today (May 21), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Domestic port traders are quoting steadily, as the market is affected by a rumor about an investigation into GM-soybeans. But there is no any fresh cues on the investigation. Moreover, the market is in dismal trading now, as downstream buyers lack of enthusiasm for buying. Meanwhile, 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. 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 partly fluctuate by 0.02 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 cottonseed oil and cottonseed meal goes not well, so inland oil mills suffer from profit losses and force price down to take a purchase. As the buying and selling are limited amid a market stalemate, cottonseed price is predicted to fluctuate to adjust in a short term.
Oils:
Summary: U.S. soybean futures closed higher on Wednesday as China would turn its purchases to the US market after the Brazilian currency gained against the U.S. dollar. And oil futures also post moderate gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil mostly go up 20-50 CNY/tonne, attracting some low-level purchases. China attaches great importance to agricultural inventories under the impulse of the coronavirus pandemic, and its purchasing demand has bolstered US soybeans to continue bouncing. And also driven by a rise in crude oil prices, domestic oil market continues to fluctuate to rebound. However, 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. Meanwhile, the demand for oils has been dismal as catering businesses have been unable to resume normal operation under the impact of the pandemic. Soybean oil stocks thus keep rising, which may limit the upward space in the oil market. The oil market may fluctuate frequently in the near term, and it needs more substantial supports to break off the weak trend. Buyers are suggested to make appropriate replenishment on the dips, and not to chases after excessively high prices.
Soybean oil: GB Grade I soybean oil is mainly priced at 5490-5600 CNY/tonne in domestic coastal areas, mostly up 20-50 CNY/tonne. (Tianjin traders 5510; Rizhao traders 5500; Zhangjiagang traders 5600; and Guangzhou traders 5490-5510).
Palm oil: RBD palm olein is mainly priced at 4820-5010 CNY/tonne in coastal areas, up 20-40 CNY/tonne. (Tianjin traders 4890, up 30; Rizhao traders 5000-5010, up 20; Zhangjiagang traders 4930, up 20; Guangzhou traders 4820, up 40; and Xiamen not available).
Imported rapeseed oil: Imported rapeseed oil price moves higher today, of which it settles up 30-40 CNY at 7190-7370 CNY/tonne in coastal regions (Fujian 7320; Guangdong not available; and Guangxi 7190). China’s rapeseed crush has been staying at a low level, as China and Canada have been at a deadlock. Domestic oil mills are mainly making deliveries of contracts, which helps support the market. But May-July soybean imports will probably hit a monthly average of nearly 10 mln tonnes, and soybean crush is expected to reach 2 mln tonnes both this week and next week; hence, soybean oil stocks will be on the rise. Besides, global catering businesses are still crippling under the pandemic. These bearish fundamentals may reduce rises in rapeseed oil prices. Overall, rapeseed oil market is predicted to follow futures to fluctuate in the short run, and its outlook needs to be seen with caution.
Cottonseed oil: Cottonseed oil prices are stable with some declines of 50 CNY/tonne today. The monthly arrival of imported soybeans will reach up to nearly 10 mln tonnes from May to July, so soybean crush may increase to an extremely high level of 2 mln tonnes for the next 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. But oils futures on Dalian Commodity Exchange also moderately go up today, and spot soybean oil and palm oil mostly up by 20-50 CNY/tonne. Additionally, cottonseed is pricey due to little inventory and the operation rate still stays at a low level. Therefore, cottonseed oil market is bolstered by these factors, and many enterprises prop up price. It is predicted that short-term cottonseed oil market may fluctuate to adjust. Buyers can take a hand-to-mouth strategy.
(USD $1=CNY ￥7.09)
