Today (Jul. 3rd), 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, and Russian soybean is 4,230 yuan/tonne. The stable quotations from traders is supportive to China's soybean market amid rigid demands and insufficient supply of imported and distributed soybean. However, the relief of U.S.-China trade tension and a expected increase of US soybean imports are negative to imported soybeans for distribution. 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 futures dropped further on improved weather conditions, and crude oil slumped by 4%, so oil futures also fall on the Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil decline go down by 20-50 yuan/tonnes in tepid trading. Soybean import arriving at port will be huge in the third quarter, and importers have bought more palm oil cargoes for growing profits. Due to such a glut market, coupled by losses in U.S. soybeans and crude oil, domestic oil futures slip further. But some mills have been bothered by swelling inventories of soybean oil under weak trading, so they may cut soybean crush sharply to 1.52 mln tonnes this week. As a result, soybean oil output will also decline, whilst the demand for small-packing oil will get better gradually in the second half of July; hence, this will give support to oil market. In a hybrid of the bull and the bear, short-term oil market will have limited downside space and will continue to follow futures to fluctuate frequently. And the market is predicted to be buoyed by the peak demand for small-packing oil later or the restart of concerns over weather conditions for U.S. soybeans. Buyers can stay on the sidelines or take a hand-to-mouth basis.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,220-5,360 yuan/tonne in domestic coastal areas, some down by 30-60 yuan/tonne. (Tianjin 5,160, Rizhao 5,180, Zhangjiagang 5,310, and Guangzhou 5,250).
Palm oil: 24-degree palm oil is mainly priced at 4,200-4,300 yuan/tonne in coastal areas, mostly down by 10-40 yuan/tonne. (Tianjin 4,290-4,300, down 30; Rizhao 4,260, down 40; Zhangjiagang 4,230, down 20; Guangzhou 4,200, down 10; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil falls in price today, of which it settles down 20-50 yuan at 6,770-6,950 yuan/tonne in coastal areas. (Fujian 6,780, down 20; Guangdong 6,770, down 20; and Guangxi 6,950, stable). Rapeseed oil market has gone begging due to its subdued demand by its large spread with soybean oil and palm oil. Moreover, mills will probably keep high utilization rate for soybean crush due to its huge import volume arriving at port in the third quarter, so that soybean oil will stockpile higher further. And palm oil is also in adequate inventory. Therefore, rapeseed oil market is negative due to its fundamentals. But it is unlikely for China and Canada to settle their conflicts within a short time, so rapeseed supply may take on a tight outlook. And it will soon be the right season for small-packing oil stockpiles. Hence, rapeseed oil prices may have limited downside space and will maintain at a high level. Buyers can wait for low and stable prices to buy in small batch on the dips.
Cottonseed oil: Cottonseed oil today stays stable with some weak fluctuations of 50-200 yuan/tonne. 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 oils on DCE fall back and spot soybean oil and palm oil drop 20-50 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 6.88)
