Today (Jul. 10th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price is steady with a drop today, among which Kazakhstan soybean is down 100 yuan/tonne from yesterday to settle at 4,370 yuan/tonne , and Russian soybean is unchanged from yesterday to settle at 4,170 yuan/tonne. The decreased demand and the dealers' increasing willingness of delivery in contango are negative to imported and distributed soybean. Besides, Chinese and U.S. chief trade negotiators hold telephone conversation and exchanged views on implementing the consensus reached by the two heads of state on the sidelines of the G20 summit in Osaka. According to Bloomberg, U.S. Treasury Secretary Mnuchin may visit China soon and the U.S.-China trade talks are likely to resume. Amid the expected increase of US soybeans imports and the ample supply globally, the rising supply of imported soybean will also be negative to China's market. Short-term prices likely maintain stable with weak momentum.
Cottonseed: Cottonseed prices today are partially stable with most purchase activities suspending, due to the reducing supply of cottonseed. 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 take a hand-to-mouth purchasing strategy.
Oils:
Summary: U.S. soybeans continued to close with gains last night on low good-to-excellent crop conditions. Chinese and U.S officials conducted a phone call to exchange views on implementing a consensus reached between Chinese President Xi Jinping and U.S. President Donald Trump at their meeting in Osaka, which was the first high-level engagement after the meeting, and Treasury Secretary Steven Mnuchin might soon visit China; hence, the two countries are expected to resume their trade talks. And on the Dalian Commodity Exchange today, oil futures are fluctuating in a narrow range. In the spot markets, soybean oil mostly increases by 10-30 yuan/tonne and palm oil fluctuates by 10-50 yuan/tonne. Soybean oil market has seen tepid trading for current delivery month, yet better trading upon forward low basis. Soybean oil inventory has dropped following the decline in soybean crush, so domestic soybean oil futures are slightly on the strong trend. In addition, mills are active in propping up prices as packing-oil stockpiles will gradually start soon, so short-term soybean oil spots will likely extend its strong trend. But palm oil is predicted to be on a weaker trend because its inventory is growing with huge imports. Overall, oil market may be influenced by huge import of soybean in the third quarter. Buyers can replenish properly on the dips, but not to chase up prices too high.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,260-5,410 yuan/tonne in domestic coastal areas, up by 10-30 yuan/tonne. (Tianjin 5,240-5,250, Rizhao 5,300, Zhangjiagang 5,400, and Guangzhou 5,320).
Palm oil: 24-degree palm oil is mainly priced at 4,220-4,300 yuan/tonne in coastal areas, fluctuating by 10-50 yuan/tonne. (Tianjin 4,290-4,300, up 10; Rizhao 4,280, down 10; Zhangjiagang 4,220, up 20; Guangzhou 4,220, up 50; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 30-50 yuan at 6,790-6,900 yuan/tonne in coastal areas. (Fujian 6,800, down 40; Guangdong 6,790, down 40; and Guangxi not offered).Rapeseed oil market has few buyers now as its demand is cut by its large price gap with soybean oil and palm oil. Besides, soybean crush may remain high due to its huge import in the third quarter. As a result, rapeseed oil market turns bearish due to such fundamentals as adequate inventories of soybean oil and palm oil. But it is difficult for China and Canada to enter into a thaw in a short term, so rapeseed supply may get tightened later, coupled with the start of small-packing oil stockpiles, so rapeseed oil market may receive some support. Buyers can replenish in small batch on the dips and remain cautious in driving up prices.
Cottonseed oil: Cottonseed oil today stays stable with a drop of 50 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 adjustment is restricted when operation rate and output is low; cottonseed price is high; U.S. soybeans overnight close up again and today oils on DCE fluctuate narrowly with spot soybean oil mostly up 10-30 yuan/tonne; restocking of small-packing oils approaches. Besides, the U.S. soybean crop condition is at a low level. And Chinese and U.S. chief trade negotiators hold telephone conversation and exchanged views on implementing the consensus reached by the two heads of state on the sidelines of the G20 summit in Osaka. According to Bloomberg, U.S. Treasury Secretary Mnuchin may visit China soon and the U.S.-China trade talks are likely to resume. Short-term cottonseed oil is likely to fluctuate narrowly, and buyers are suggested to take a hand-to-mouth purchasing strategy.
(USD $1=CNY 6.89)
