Today (Jul. 24th), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean price is steady today, among which Brazilian selected soybean for food is unchanged from yesterday at 3,850 yuan/tonne, and Russian soybean is at 4,150 yuan/tonne, unchanged from yesterday. The insufficient quantity of imported and distributed soybean supports the prices. However, the imported soybean still suffers from some negative factors that top officials of China and US will make a face-to-face trade negotiation in Shanghai, China from next Monday to Wednesday, which may lead to a news about China's US soybean purchase plan, according to Bloomberg; it's an off-season period for soybean demand; the global supply is ample. The market is mixed and short-term prices likely maintain stable.
Cottonseed: Cottonseed prices today are flat and partially up 0.04 yuan/kg with most purchase activities suspending, due to the declining supply of cottonseed, and a certain period before the marketing of new cottonseed. However, the market is curbed because the cottonseed trading is not much as oil mills are reluctant to purchase and some mills mainly use its own stock due to poor crush margin. Short-term price is likely to stay stable with fluctuation in narrowed range and buyers can take a hand-to-mouth purchasing strategy.
Oils:
Summary: U.S. soybean extended losses in overnight trading as the crop rating as expected, dismal exports and bumper harvests in South America. Chinese government was said to allow five firms to start a first tranche of US soybean import of 2.2 mln tonnes without the existing tariff and the second tranche to foreign-owned and transnational enterprises. The two trances would include a total of 6.0 mln tonnes in these two tranches and must arrive at ports by the end of this year, and it would take about 20 working days to get the import license. There is no official confirmation till now, but meal futures are cracked down as the market is concerned about huge soybean import. Therefore, oil futures continue to tick higher and expand gains on the Dalian Commodity Exchange today due to the arbitrage of buying oils and selling meals. In the spot markets, soybean oil increases by 10-50 yuan/tonne and palm oil by 40-60 yuan/tonne to attract some low-level replenishment, but there is not much trading for those with big price rises. Mills tend to prop up oil prices due to low utilization rate under swelling soybean meal inventory and the upcoming peak season for packing oil stockpiling. But soybean oil inventory has increased by 1.2% weekly to 1.46 mln tonnes in slow delivery, and soybean crush is expected to grow in the next two weeks; hence, there is limited space for price to rebound. Overall, oil market may still fluctuate frequently, and will fluctuate to rebound moderately.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,280-5,450 yuan/tonne in domestic coastal areas, up by 10-50 yuan/tonne. (Tianjin 5,280-5,290, Rizhao 5,330, Zhangjiagang 5,450, and Guangzhou 5,390).
Palm oil: 24-degree palm oil is mainly priced at 4,320-4,400 yuan/tonne in coastal areas, up by 40-60 yuan/tonne. (Tianjin 4,360-4,370, up 40; Rizhao 4,400, up 60; Zhangjiagang 4,300, up 40; Guangzhou 4,320, up 50; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil goes up today, of which it settles up by 10-30 yuan at 6,940-7,050 yuan/tonne in coastal areas. (Fujian not offered; Guangdong 6,940, up 20; and Guangxi 7,050, up 30). Rapeseed is in a tight supply outlook before a thaw between China and Canada, for rapeseed and oil import is still blocked, coupled with the upcoming stockpiling for packing oil before the festival; thus, rapeseed oil market is buoyed. But soybean oil is in huge supply as mills will pick up soybean crush in the coming two weeks, and this will keep a lid on the rebound of oil prices. Overall, short-term rapeseed oil will probably fluctuate to consolidate at a high level, and buyers can make replenishment in small batch on the dips and had better not chase up prices excessively.
Cottonseed oil: Cottonseed oil today stays stable due to the low operation rate and output, high cottonseed price, and busy season for restocking of small-packing oils approaches. Besides, today oils on DCE further rise in bigger range on arbitrage of buying oils and selling meals, and spot soybean oil goes up 10-50 yuan/tonne. However, cottonseed oil is negative when five Chinese crushers will likely get the initial import quota of 2,200,000 tonnes soybeans with additional tariffs exemption, and the second quota may be 6,000,000 tonnes; top officials of China and US will make a face-to-face trade negotiation in Shanghai, China from next Monday to Wednesday; the fundamental pressure in staple oil market is high; the consumption for cottonseed oil as blending oils is not a lot. Short-term cottonseed oil is likely to fluctuate in narrow range. Buyers with insufficient stock can make proper replenishment upon low prices due to a favourable short-term price amid staple oils rebounding.
(USD $1=CNY 6.88)
