Today (Jul. 1st), 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 ports and the estimated total volume of only 300,000 tonnes for nationwide distributed soybean. However, when U.S.-China relationship is improved as American and Chinese leaders has agreed to resume trade talks after the meeting during G20 summit and Trump said additional U.S. tariffs wouldn't be placed on Chinese goods, a possible US soybeans import increase is negative to China's market. Meanwhile, the bumper crop harvest in South America and huge global supply still curbs China's market. Short-term prices likely maintain stable.
Cottonseed: Today cottonseed mostly stays stable with a drop of 0.04 yuan/kg for some prices when the cottonseed trading is not much as oil mills are reluctant to purchase and some mills mainly use its own stock due to poor crush margin and low operation rate; and delivery of cottonseed oil and cottonseed meal is not good. However, the decline is curbed by the optimistic outlook of some dealers holding goods and their selling-loath mood amid a tight supply of cottonseed day by day. Short-term price is likely to fluctuate in narrow range, and buyers can take a hand-to-mouth purchasing strategy.
Oils:
Summary: U.S. soybean futures rallied last Friday as soybean planting acreage came in well below forecasts. Oil futures fall in early trade on the Dalian Commodity Exchange today on a detente in tariff disputes as the United States and China have agreed to restart trade talks after the meeting between the two presidents, but then reverse losses to rebound as traders close their positions for the ratio of meals and oils. In the physicals, soybean oil and palm oil are buoyed to increase by 20-60 yuan/tonne to attract some purchases at low prices, but the total trading volume is low. Due to swelling inventories of soybean meal in several mills, soybean crush has declined by 3.4% weekly to 1.73 mln tonnes last week, and may fall sharply lower to around 1.52 mln tonnes this week. The demand for small-packing oil will get better gradually in the second half of July, and thus soybean oil has begun to see rising basis. But due to huge quantity of soybeans arriving at ports in the third quarter, and high stockpiles of soybean oil, oil market will find its rebounds restricted and may follow futures to post frequent fluctuations, and may rally moderately in fluctuation with higher demand for small-packing oil. Buyers are suggested to keep appropriate stockpiles, but not to buy up on those with extremely huge rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,220-5,370 yuan/tonne in domestic coastal areas, up by 20-60 yuan/tonne. (Tianjin 5,220-5,230, Rizhao 5,220, Zhangjiagang 5,370, and Guangzhou 5,330).
Palm oil: 24-degree palm oil is mainly priced at 4,270-4,360 yuan/tonne in coastal areas, up by 30-70 yuan/tonne. (Tianjin 4,350-4,360, up 30; Rizhao 4,340-4,350, up 70; Zhangjiagang 4,260, up 20; Guangzhou 4,270-4,280, up 30; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil declines today, of which it settles down 70-80 yuan at 6,800-7,000 yuan/tonne in coastal areas. (Fujian 6,800, down 70; Guangdong 6,810, down 80; and Guangxi 7,000, stable). As the demand for rapeseed oil has been severely cut by its large price spread with soybean oil and palm oil, its inventory has climbed higher to 530,000 tonnes last week. Meanwhile, soybean oil inventory will keep mounting higher as mills will maintain higher utilization rate for huge quantity of soybeans in the third quarter, and palm oil is also seeing higher stockpiles. These factors will jointly drag down rapeseed oil market. However, there is still huge uncertainty in trade talks between China and the United States and it is almost unlikely for China and Canada to settle their conflicts within a short time, so rapeseed supply may get tightened in the second half of July amid lower imports. Therefore, rapeseed oil prices will not collapse in the short run, and will stay at a high level. Buyers can wait for low and stable prices to replenish in small batch on the dips.
Cottonseed oil: Cottonseed oil today stays stable with a drop of 100 yuan/tonne for some prices, which is due to the limited consumption for cottonseed oil as blending oils, high fundamental pressure in main oil market, and poor delivery volume. However, the price decline is restricted when operation rate and output is low on poor crush margin; cottonseed price is high; and liquidation upon ration of oils to meals results in a rebound for oils on DCE and a rise of 20-60 yuan/tonne for spot soybean oil and palm oil. Short-term cottonseed oil is likely to fluctuate narrowly, and buyers are suggested to take a hand-to-mouth purchasing strategy.
(USD $1=CNY 6.84)
