Today (Jul. 25th), 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 not offered for out of stock, 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 the White House confirmed that U.S. Trade Representative and Treasury Secretary would go to Shanghai next week and negotiate with China from July 30, which may lead to a news about China's US soybean purchase plan if the negotiation goes well, based on news from 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 partially stable 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 futures rebounded as the market weighed the return of high temperatures in the production regions and the U.S-China trade talks in Shanghai from July 30, in addition that China was said to allow 6 mln tonnes of U.S. soybean imports in two tranches free of additional tariff, and oil futures also extend gains on the Dalian Commodity Exchange today due to the arbitrage of buying oils and selling meals. In the spot markets, soybean oil goes up by 30-50 yuan/tonnes and palm oil by 10-30 yuan/tonne to attract some low-level purchases and little high-level trading, and the total trading volume remains low. Oil mills are active in raising prices on account of better demand and the fund boost as utilization rate remains low and packing oil stockpiling has already started. But soybean arrivals are expected to be huge, and soybean crush will climb higher under quicker soybean meal delivery. Meanwhile, China and the United States are to resume trade talks. Therefore, oil market is curbed to have limited rebounds. Overall, short-term oil spots will extend fluctuations to consolidate and may fluctuate frequently with some rises at the bottom. Buyers are suggested not to chase up prices excessively, but to replenish properly on the dips.
Soybean oil: GB Grade I soybean oil is mainly priced at 5,280-5,450 yuan/tonne in domestic coastal areas, up by 30-50 yuan/tonne. (Tianjin 5,350-5,360, Rizhao 5,380, Zhangjiagang 5,530, and Guangzhou 5,460).
Palm oil: 24-degree palm oil is mainly priced at 4,330-4,430 yuan/tonne in coastal areas, up by 10-30 yuan/tonne. (Tianjin 4,380-4,390, up 10; Rizhao 4,430, up 30; Zhangjiagang 4,330, up 10; Guangzhou 4,330, up 10; and Xiamen not offered).
Imported rapeseed oil: Imported rapeseed oil steadily fluctuates today, of which it fluctuates by 10-20 yuan at 6,920-7,050 yuan/tonne in coastal areas. (Fujian not offered; Guangdong 6,920, down 20; and Guangxi 7,050, stable). Rapeseed meal market has few buyers recently since its demand is severely cut by its widened price gap with soybean oil and palm oil. Besides, oil mills will probably maintain high utilization rate on account of huge soybean arrivals at port in the third quarter. The fundamentals of oil market remain bearish due to adequate inventories of soybean oil and palm oil, and this is a bearish factor to the rapeseed oil market. However, rapeseed is in a tight supply outlook as it is difficult for China and Canada to settle their issues in the near run. And the peak season for the small packing oil stockpiling is coming soon. Hence, rapeseed oil may receive some support to extend high-level, narrow-range fluctuations. Buyers can make replenishment in small batch on the dips and remain cautious in chasing up prices.
Cottonseed oil: Cottonseed oil today stays stable with a rise of 100 yuan/tonne for some prices due to the low operation rate, high cottonseed price, and busy season for restocking of small-packing oils approaches. Besides, today oils on DCE further rise on arbitrage of buying oils and selling meals, and spot soybean oil goes up 30-50 yuan/tonne. However, the price adjustment is restricted by the limited consumption for cottonseed oil as blending oils, and high fundamental pressure in staple oil market. Short-term cottonseed oil is likely to strongly fluctuate. 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)
