Today (Jul. 2nd), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price is steady today, among which Kazakhstan soybean is unchanged at 4,470 yuan/tonne from yesterday. Quotations from traders is stable due to insufficient supply of imported and 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 and allow Huawei to buy US products, a possible increase for US soybeans import after US-China trade tension eases is negative to China's market. Besides, 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 cottonseed trading is not a lot; and delivery for both cottonseed oil and meal is not good. Short-term prices are likely to fluctuate in narrow range and buyers are suggested to stay on the sideline for the present.
Oils:
Summary: U.S. soybean slumped overnight as its harvest prospect was buoyed by improving weather conditions. Palm oil edges down on the Dalian Commodity Exchange today, but soybean oil continues to inch higher as traders close their position in the arbitrage of buying meals and selling oils. In the physicals, soybean oil steadily drops by 10 yuan/tonne and palm oil mostly declines by 10-20 yuan/tonne in tepid trading. Soybean oil futures has walked up on a strong trend in recent two days. Firstly, soybean meal has been in weak trading with its inventory growing and several mills in Shandong and South China have been bothered by swelling inventories. Secondly, 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, so soybean oil will see lower output. Lastly, the demand for small-packing oil will get better gradually in the second half of July, and funds with long positions will help boost soybean futures to rebound. But a large quantity of soybeans are predicted to arrive at port in the third quarter, and oil market is still in a glut, therefore, oil prices will have weak impetus to rebound before the demand takes a practical turn for the better, and short-term prices may follow futures to post narrow and frequent fluctuations. With the coming of the peak season for small-packing oil stockpiles, coupled by the restart of capricious weather for U.S. soybeans if possible, oil market will hopefully fluctuate to rally moderately. Buyers can make replenishment in small batch on low and stable prices, and must be cautious in driving up prices.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,220-5,360 yuan/tonne in domestic coastal areas, some down by 10-20 yuan/tonne. (Tianjin 5,200-5,210, Rizhao 5,200, Zhangjiagang 5,360, and Guangzhou 5,280).
Palm oil: 24-degree palm oil is mainly priced at 4,220-4,340 yuan/tonne in coastal areas, mostly down by 10-40 yuan/tonne. (Tianjin 4,320-4,340, down 20; Rizhao 4,300, down 40; Zhangjiagang 4,250, down 10; Guangzhou 4,220, down 30; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil stays stable today, of which it settles at 6,780-7,000 yuan/tonne in coastal areas. (Fujian 6,800, stable; Guangdong 6,790; and Guangxi 7,000, stable). As there is no sign of a thaw between China and Canada, import volume of rapeseed is small and its supply will be tightened in the second half of July. Hence, rapeseed oil market will be buoyed. But its demand has been severely influenced by its huge price gap with soybean oil and palm oil whose inventories have been increasing. Moreover, mills will maintain high utilization rate for soybean crush due to its bumper supply. So the market will be dragged down to have little upward potential. Overall, short-term prices will fluctuate at the high level, and buyers can wait for the moment.
Cottonseed oil: Cottonseed oil today stays stable with a drop of 50 yuan/tonne for some prices. The negative factors comes from the limited consumption for cottonseed oil as blending oils, high fundamental pressure for staple oils, and poor delivery volume. Besides, today spot soybean oil is stable with a decline of 10 yuan/tonne and palm oil mostly declines 10-20 yuan/tonne. However, the price decline is restricted when operation rate and output is low on poor crush margin; and cottonseed price is high. Short-term cottonseed oil is likely to fluctuate narrowly, and buyers are suggested to stay on the sideline for the present.
(USD $1=CNY 6.86)
