Today (Jul. 5th), 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 unchanged at 4,230 yuan/tonne from yesterday. The stable quotations from traders is supportive to China's soybean market amid rigid demands and insufficient supply of imported and distributed soybean. However, amid the relief of U.S.-China trade tension and a rumour that China will buy US soybean again, an expected increase of US soybean imports as well as the bumper crop harvest in South America is negative to the market in China. Short-term prices likely maintain stable.
Cottonseed: Cottonseed prices today are 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; 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. stock market closed last night, and oil futures are in range-bound, choppy trading on the Dalian Commodity Exchange today. In the spot market, soybean oil steadily goes up by 10-30 yuan/tonne and palm oil steadily fluctuates by 10 yuan/tonne to attract some low-level replenishment, but the total trading seems to be not as good as yesterday. Some mills have no choice but to halt for their swelling inventories due to weak soybean meal market, so soybean oil has seen lower output. And traders may gradually start to stockpile packing oil in two weeks. Therefore, oil mills are now propping up prices and sending the basis to increase. However, soybean import estimate is pegged at a monthly average of 9.50 mln tonnes in the third quarter, and importers are buying up on lucrative palm oil. And such supply pressure is cracking down on the rebound of oil market. Overall, short-term oil spots will likely extend its frequent and narrow fluctuations, and may go upward moderately only after the start of small-packing oil stockpiles or the return of weather speculation. Buyers can keep light stockpiles and wait for low and stable prices to make proper replenishment.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,200-5,370 yuan/tonne in domestic coastal areas, some up by 10-30 yuan/tonne. (Tianjin 5,200-5,210, Rizhao 5,230, Zhangjiagang 5,370, and Guangzhou 5,290).
Palm oil: 24-degree palm oil is mainly priced at 4,200-4,320 yuan/tonne in coastal areas, a partial rise of 10 yuan/tonne. (Tianjin 4,310-4,320, flat; Rizhao 4,280, up 10; Zhangjiagang 4,240, flat; Guangzhou 4,200-4,210, down 10; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil is up in price today, of which it settles up 10-20 yuan at 6,860-6,950 yuan/tonne in coastal areas. (Fujian 6,870, up 10; Guangdong 6,860, up 10; and Guangxi not offered). As it is unlikely for China and Canada to solve their conflicts in a short term, rapeseed and rapeseed oil import is still facing some obstacles, so rapeseed will get tightened before a thaw in bilateral relationship. And rapeseed oil prices will thus maintain at a high level. But the demand for rapeseed oil is subdued by its large price spread with soybean oil and palm oil. Moreover, soybean import is very huge with a monthly average of 9.5 mln tonnes from July to September, so soybean oil inventory will keep increasing, in addition to palm oil inventory. Therefore, rapeseed oil market is weighed down to see limited upward space. Overall, short-term rapeseed oil market will likely fluctuate frequently at high levels, and buyers are suggested to keep light stockpiles.
Cottonseed oil: Cottonseed oil today stays stable. And some support comes from the following situations that the operation rates and output are low; cottonseed price is strong. Besides, soybean oil is stable with a rise of 10-30 yuan/tonne and a busy season for restocking of small-packing oils is coming. However, cottonseed oil is weighted on owing to the limited consumption for cottonseed oil as blending oils, thin turnover of new orders, high fundamental pressure in main oil market, and poor delivery volume. Short-term cottonseed oil is likely to fluctuate narrowly and buyers can stay on the sideline for the present or take a hand-to-mouth purchasing strategy.
(USD $1=CNY 6.88)
