Today (Jun. 26th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price is steady today, among which Uruguayan soybean is not offered for out of stock, Kazakhstan soybean is unchanged at 4,470 yuan/tonne from yesterday. Quotations from traders is stable due to a small amount of imported and distributed soybean supply from Tianjin port and a favorable demand. As to U.S.-China relationship, the two heads of state would likely agree to restart negotiations during the G20 Summit and US would likely refrain from putting the 25% tariffs on the remaining $300 billion in Chinese goods. Although US-China trade relationship is expected to improve, US soybean import is still restricted ahead of an agreement made by the two parties, which is favorable to China's market. However, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely maintain stable.
Cottonseed: Cottonseed prices today are partially stable with most purchase activities suspending, due to the reducing supply of cottonseed and a selling-loath mood of some traders holding goods on their optimistic outlook. However, cottonseed market is weighted on when operation rate and purchase activity are lower on poor crush margin; some mills mainly use its own stock and quantity of market trading is not a lot. Short-term prices are likely to fluctuate in narrow range and buyers are suggested to stay on the sideline for the present and wait for the news of this week's meeting between U.S. President Donald Trump and China President Xi Jinping.
Oils:
Summary: U.S. soybean futures traded lower overnight as the weather in the latest forecast pointed to a favorable outlook for accelerating soy planting in Midwest. There is sign of a detente between China and the United States as Bloomberg reported that the two presidents would officially agree to resume trade talks at the G20 summit, and the United States might postpone its additional tariff on $ 300 bln worth of Chinese goods, so oil futures drop on lower opens on the Dalian Commodity Exchange today. Oil mills will maintain their high utilization rate as soybean import may reach a total of 29.40 mln tonnes in the third quarter, so soybean oil is expected to hit above 1.50 mln tonnes in inventory. Besides, Chinese buyers bought another 4 cargoes of lucrative palm oil yesterday, so palm oil inventory will also keep rising. But oils are not in the right season, and mills are not in quick shipments. Therefore, oil market is kept under check by its negative fundamentals. But due to capricious weather in U.S. soybean planting areas and huge uncertainties in trade talks, oil prices will have little downside space and may fluctuate to edge down in the short run. Buyers can wait for low and stable prices to make replenishment in small batch on the dips.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,140-5,320 yuan/tonne in domestic coastal areas, down by 10-20 yuan/tonne. (Tianjin 5,140-5,150, Rizhao 5,170, and Zhangjiagang 5,320, and Guangzhou 5,260).
Palm oil: 24-degree palm oil is mainly priced at 4,210-4,300 yuan/tonne in coastal areas, down by 10-40 yuan/tonne. (Tianjin 4,300, down 10; Rizhao 4,270, down 20; Zhangjiagang 4,220, down 20; Guangzhou 4,210, down 40; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily inches lower today, of which it settles at 6,850-6,960 yuan/tonne in coastal areas. (Fujian 6,850, down 20; Guangdong 6,870, down 20; and Guangxi 6,960, stable). Rapeseed oil market has few buyers as its demand is severely cut by its large price spreads with soybean oil and palm oil. And mills may maintain high utilization rate for soybean crush due to its huge import in the third quarter. Due to such fundamentals as huge inventories of soybean oil and palm oil, rapeseed oil market turns bearish. However, it is unlikely that China and Canada will fix their mutual relationship immediately now that China have suspended all import of meat products from Canada from today. And rapeseed will head for a tight supply outlook in the second half of July, so short-term rapeseed oil will unlikely slump and may extend narrow-range fluctuations at high prices. Buyers can just wait for the moment on account of policy risks.
Cottonseed oil: Cottonseed oil today stays stable with a decline of 50 yuan/tonne cottonseed oil is weighted on owing to the limited consumption for cottonseed oil as blending oils, high fundamental pressure in main oil market, and poor delivery volume. Besides, US soybeans drop on a weather forecast about improved conditions in producing regions. Moreover, as the U.S.-China trade tension eases when the two heads of state would likely agree to restart negotiations during the G20 Summit and US would likely refrain from putting the 25% tariffs on the remaining $300 billion in Chinese goods, today oils on DCE go lower with low opening and spot oils decline 10-40 yuan/tonne. However, the price decline is curbed by low operation rate, limited cottonseed oil output and strong cottonseed. Short-term cottonseed oil is likely to fluctuate weakly, and buyers are suggested to stay on the sideline for the present and wait for the news of this week's meeting between U.S. President Donald Trump and China President Xi Jinping.
(USD $1=CNY 6.89)
