Today (Jun. 3rd), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price is steady today, among which Russian soybean is temporarily not offered, Kazakhstan soybean is unchanged at 4,250 yuan/tonne from last Friday, and Myanmar soybean is unchanged at 4,330 yuan/tonne from last Friday. China's soybean market is favourable on traders' optimistic outlook as the arrivals in China's ports are little, while the demand is strong. Besides, the US soybean import is restricted as uncertain outlook of U.S.-China trade talks. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely maintain stable with strong momentum.
Cottonseed: Cottonseed prices today rise 0.02-0.1 yuan/kg due to the decreasing cottonseed quantity putting pressure on market supply and the optimistic outlook supporting traders' selling-loath mood. However, the cottonseed trading is not much as oil mills are reluctant to purchase and some mills mainly use its own stock due to the high price of cottonseed and poor crush margin. Short-term cottonseed is likely to go strong. And the upward trend of the oil and meal in downstream slows down now, so does the buyers' purchase pace.
Oils:
Summary: U.S. soybean closed with losses last Friday on technical adjustments and a new wave of concerns over soybean sales as Trump announced that the U.S. would place a 5% tariff on all products from Mexico, and oil futures are expanding their losses on the Dalian Commodity Exchange today. In spot markets, soybean oil declines by 20-80 yuan/tonne and palm oil by 50-60 yuan/tonne in tepid trading. Chinese mills have bought a total of 8.33 mln tonnes of soybean for June deliveries and an average of 9.0 mln tonnes separately for July and August shipments from South America due to good crush margins, so soybean crush this week may return to above 1.85 mln tonnes. Oil futures reverse to decline on relaxed oil supply. But weather speculations on U.S. soybeans may occur at anytime, and there is still no sign of a thaw in trade frictions, so short-term oil futures will have little room to downside. Buyers can wait for steady falls to make proper replenishment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,190-5,400 yuan/tonne in domestic coastal areas, down by 20-80 yuan/tonne. (Tianjin 5,190-5,200, Rizhao 5,220, and Zhangjiagang 5,400, and Guangzhou 5,2505,270).
Palm oil: 24-degree palm oil is mainly priced at 4,310-4,370 yuan/tonne in coastal areas, down by 50-60 yuan/tonne. (Tianjin 4,350-4,360, down 50; Rizhao 4,370, down 60; Zhangjiagang 4,350, down 50; Guangzhou 4,310-4,320; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily goes down today, of which it settle down 20-30 yuan at 7,010-7,200 yuan/tonne in coastal areas. (Fujian 7,070, down 20; Guangdong not offered; and Guangxi 7,200, stable). Rapeseed oil has seen its demand severely cut by its enlarging spread with soybean oil and palm oil, sending its own inventory to increase by 3.4% to 480,000 tonnes in coastal areas last week. Moreover, domestic mills will maintain their utilization rate at a high level as they have bought a total of 8.33 mln tonnes of soybean for June deliveries and an average of 9.0 mln tonnes separately for July and August shipments from South America due to rising premiums. Therefore, rapeseed oil market is weighed down by huge supply of soybean oil and palm oil. But rapeseed supply may get tightened later due to tensions between China and Canada, so short-term trend will not collapse and will remain at high levels. Buyers can wait on the sidelines.
Cottonseed oil: Cottonseed oil today stays stable with some fluctuations of 10-100 yuan/tonne due to low operation rates and output, as well as strong cottonseed prices. However, the buyers' purchasing activities are curbed by the limited cottonseed oil volume for blending, thin turnover of new orders, and high fundamental pressure in main oil market. Besides, today the price decline of oils on DCE is increasing, and spots soybean oil are down 20-80 yuan/tonne. Moreover, market restarts worrying the US soybeans demand as Trump said the United States will impose a 5% tariff on all goods coming in from Mexico, a second largest importer of US soybeans. Add that an ongoing weather speculation of US soybeans and short-term cottonseed oil is likely to fluctuate. Buyers are suggested to take a hand-to-mouth buying strategy.
(USD $1=CNY 6.91)
