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Daily Review on Markets for Oilseeds and Oils in China--10/13/2020

2020-10-13 www.cofeed.com

Today (Oct 13), the market for oilseeds and oils in China is shown as follows:

 

Oilseeds:

 

Imported soybean: Non-GM Canadian soybeans are priced at 5,200 CNY/tonne at Tianjin port. The supply of imported non-GM soybeans is decreasing at ports, which is supporting imported soybean market. However, soybean shipments are interrupted due to strict commodity inspections at Shandong ports and as the COVID-19 epidemic gets worse in Qingdao. Moreover, imported soybean is not a preferred choice as new domestic soybeans are on marketing and of higher and higher quality. In addition, China ramped up soybean purchases earlier, which is likely to further expand the supply. Overall, imported soybean market is predicted to steady with slight declines in the near term.

 

Cottonseed: Cottonseed prices fluctuate by 0.01-0.10 CNY/kg today. Cottonseed output this year has decreased compared with the previous year. And cottonseed oil and cottonseed meal are keeping strengthening for the moment. Thus, cottonseed market is supported. But the delivery of cottonseed is still under impact of the COVID-19 outbreak in Xinjiang. Besides, the quantity of new cottonseed appeared on the market is increasing day by day, and oil plants are cautious in purchasing cottonseed due to high price. In short, cottonseed market moves with fluctuations today but maintain a strong trend on the whole.

 

Oils: 

 

Summary: U.S. soybean sharply fell on Monday on heavy seasonal harvest pressure and as Brazil’s producing regions received some much-needed rains. Oils futures snap winning streak to decline on China’s Dalian Commodity Exchange today. Oil futures saw sharp losses in early trade and then gradually regain later. In the spot markets, soybean oil drops 40-50 CNY/tonne and palm oil down 30-70 CNY/tonne. The trade is expected to turn thin, with some purchases on low-level basis.

 

China’s soybean oil stocks are not at high levels, and rapeseed oil and palm oil stockpiles remain low. Meanwhile, the demand for oils sees a big rise in feed this year, and buyers are replenishing stocks after holidays, so soybean oil traded high at 106,000 tonnes. The supply of oils is under no pressure in China now. In addition, the weather pattern in South America is an increasing focus for the market now, coupled with a lingering global inflation expectation, funds are keen to buy dips for long positions. Although Dalian futures break off an uptrend to adjust now and domestic soybean crush will also resume to over 2 mln tonnes this week, the oils market will still maintain an upward trend in fluctuation on bullish supports.

 

Soybean oil: GB Grade I soybean oil is mainly priced at 7,480-7,630 CNY/tonne in domestic coastal areas, a decline of 40-50 CNY/tonne. (Tianjin traders 7480-7500; Rizhao traders 7520; Zhangjiagang traders 7530; and Guangzhou traders 7630).

 

Palm oil: RBD palm olein is mainly priced at 6690-6820 CNY/tonne in coastal areas, mostly down 30-70 CNY/tonne. (Tianjin traders 6770, down 40; Rizhao 6820, down 30; Zhangjiagang traders 6690-6700, down 70; Guangzhou traders 6700, down 30; and Xiamen not available). 

 

Rapeseed oil: U.S. soybean futures declined dramatically on Monday, and rapeseed oil futures swing to drop on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 20-30 CNY to 9,630-9,690 CNY/tonne in coastal regions in tepid trading.

 

China’s soybean stocks have risen 46% against a year earlier, and soybean crush will return to a high level in coming two weeks. Besides, domestic consumption of rapeseed oil is also affected by its widening price spread with soybean oil and palm oil. They are undermining rapeseed oil market. But China’s rapeseed crush remains at a relatively low level due to limited rapeseed imports amid tensions between Beijing and Ottawa, so oil mills are mainly carrying out contracts at present. However, rapeseed oil and palm oil stockpiles remain low, and the demand for oils sees a big rise in feed this year, so oils supply is under no pressure. Overall, rapeseed oil market will have limited declines and probably stay at the high level.

 

Cottonseed oil: Cottonseed oil prices partly keep steady and partly increase by 50-200 CNY/tonne today. Market is still affected by weather condition across crop area in South America, and funds flow into market on the dips due to existing global inflation expectations. Besides, the consumption of oil for feedstuffs has increased this year, and buyers need to make replenishment after holidays. Moreover, the operation rate in cottonseed crushing mills still stays at a low level. Hence, these have offered support to cottonseed oil market. However, U.S. soybean futures tumbled on Monday on account of heavy stress on seasonal harvest and rainfall in Brazil crop area. Oil futures on China’s Dalian Commodity Exchange pare gains today. In spot market, soybean oil down by 40-50 CNY/tonne and palm oil down by 30-70 CNY/tonne. But bulk oils market will still maintain a strong trend in the near term. It is predicted that short-term cottonseed oil market may also fluctuate to go up.

 

(USD $1=CNY ¥6.73)