Today (Jun. 6th), 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 4,330 yuan/tonne from yesterday, and Myanmar soybean is unchanged at 4,370 yuan/tonne from yesterday. China's soybean market is favourable on traders' optimistic outlook as the arrivals in China's ports are little compared with the strong demand and quick delivery pace of traders. Besides, the US soybean import is restricted as uncertain outlook of U.S.-China trade war. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely go strong.
Cottonseed: Cottonseed prices today are stable 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 amid barley harvest and the Dragon Boat Festival. Short-term cottonseed is likely to go strong. But buyers should take wait-and-see attitude when oil and meal commodities fall back due to improved weather condition for US soybeans.
Oils:
Summary: U.S. soybean closed sharply lower overnight as Midwest was forecast to see rises in temperature that would be favorable for seeding progress, and oil futures also snap off gains to edge down on the Dalian Commodity Exchange due to seasonal output growth in palm oil in Malaysia and adequate oil supply at home. In spot markets, soybean oil and palm oil both fall by 10-30 yuan/tonne in weaker trading. Soybean oil has seen a 2.6% decline weekly in its stockpiles. Besides, traders have closed their trade of buying meals and selling oils due to huge soybean meal losses. All of these have made joint efforts to support oil market, and oil losses have thus been obviously smaller than meals on the DCE today. The weather speculation is yet to finish and once it rains again, oil prices will post rallies. Buyers can wait for steady falls to make replenishment on the dips.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,210-5,370 yuan/tonne in domestic coastal areas, down by 10-30 yuan/tonne. (Tianjin 5,210-5,220, Rizhao 5,250, and Zhangjiagang 5,370, and Guangzhou 5,300).
Palm oil: 24-degree palm oil is mainly priced at 4,320-4,370 yuan/tonne in coastal areas, down 20-30 yuan/tonne. (Tianjin 4,340-4,350, down 30; Rizhao 4,370, down 30; Zhangjiagang 4,340, down 20; Guangzhou 4,320, down 30; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily edges down today, of which it settles down partly by 10-20 yuan at 7,030-7,200 yuan/tonne in coastal areas. (Fujian 7,050, stable; Guangdong 7,030; and Guangxi 7,200). Rapeseed oil has lost its buyers as its demand is severely impacted by its large spread with soybean oil and palm oil. Moreover, mills will keep high utilization rate for soybean amid its huge import in the third quarter, sending the crush up to a high level of 1.85 mln tonnes this week. Under such bumper inventories of soybean oil and palm oil, rapeseed oil market is weighed down and may fall into correction territory in the near term. But rapeseed may see supply shortages amid tensions between China and Canada. Before a thaw in tensions, rapeseed oil prices will not collapse. And buyers can take a hand-to-mouth basis due to high policy risks.
Cottonseed oil: Cottonseed oil today stays stable due to the high price of cottonseed and poor crush margin amid barley harvest and the Dragon Boat Festival, as well as strong cottonseed price. However, there are some bearish factors: the limited cottonseed oil volume for blending, thin turnover of new orders, high fundamental pressure in main oil market, and seasonal production increase of palm oil as well as China's ample oil supply. Besides, without the boost from futures outside China’s market, today oils on DCE stop rising and take a slight drop, soybean oil and palm oil spots down 10-30. Due to improved weather condition for US soybeans oil and meal commodities fall back, and accordingly short-term cottonseed oil is likely to fluctuate in narrow range. Buyers can take a wait-and-see attitude.
(USD $1=CNY 6.91)
