Today (Jul. 12th), 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 4,370 yuan/tonne from yesterday, and Russian soybean is unchanged at 4,170 yuan/tonne from yesterday. The decreased demand and the dealers' increasing willingness of delivery in contango are negative to imported and distributed soybean. Besides, the imported soybeans later are likely to increase when the soybean supply globally is ample and more US soybeans may be imported into China amid the relief of US-China trade tension and the possibility of trade talks resuming. 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 stay on the sideline or take a hand-to-mouth purchasing strategy.
Oils:
Summary: U.S. soybean futures were buoyed to extend gains by the bullish report of the USDA, but oil futures fluctuate to fall on the Dalian Commodity Exchange today due to the arbitrage of buying meals and selling oils. In the physicals, soybean oil mostly steps down by 10-20 yuan/tonnes and palm oil partially down by 20 yuan/tonne, both in weaker trading. As soybean import is predicted to be as high as 29 mln tonnes in the third quarter, mills will pick up their utilization rate as soon as the phenomenon of swelling meal inventories get a relief. Meanwhile, the ending stock of Malay palm oil in June goes above market estimates, and Chinese importers have been buying up on it due to its abundant profits. It is difficult for soybean oil to go against the weak trend of palm oil, so oil futures see a round of losses as soybean meal posts rebounds. Merely, soybean oil stockpiles have seen a drop following the declining soybean crush due to swelling soybean meal inventories, and the peak season for packing oil stockpiles will get started soon, so oil market is expected to have restricted downward space and to go upward moderately later. Buyers can wait for low and stable prices to replenish properly on the dips.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,230-5,380 yuan/tonne in domestic coastal areas, mostly down by 10-20 yuan/tonne. (Tianjin 5,230-5,240, Rizhao 5,280, Zhangjiagang 5,380, and Guangzhou 5,310).
Palm oil: 24-degree palm oil is mainly priced at 4,190-4,300 yuan/tonne in coastal areas, a partial decline of 20 yuan/tonne. (Tianjin 4,260-4,270, down 20; Rizhao 4,300, flat; Zhangjiagang 4,200, flat; Guangzhou 4,190, down 20; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily edges lower in price today, of which it settles down 10 yuan partially at 6,780-6,900 yuan/tonne in coastal areas. (Fujian 6,790, stable; Guangdong 6,780, stable; and Guangxi not offered). Rapeseed oil market has lost its buyers due to its sharply enlarged price gap with soybean oil and palm oil. Moreover, soybean import is huge in the third quarter, and importers are also buying up on lucrative palm oil. Therefore, rapeseed oil market turns negative. Nevertheless, rapeseed supply will get tightened in the second half of July since it is difficult for China and Canada to settle their conflicts in a short time, and the stockpile for packing oil will gradually get started later this month. Therefore, rapeseed oil market may have limited downward space and will fluctuate narrowly at high levels. Buyers can wait for low and stable prices to make replenishment in small batch on the dips.
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, and high fundamental pressure for staple oils. Besides, today oils on DCE decline with fluctuation and spot soybean oil and palm oil mostly drop 10-20 yuan/tonne. However, the price adjustment is restricted when operation rate and output is low; cottonseed price is high; and a busy season for restocking of small-packing oils approaches. Short-term cottonseed oil is likely to fluctuate narrowly. Buyers can just wait on the sidelines due to the correction.
(USD $1=CNY 6.87)
