Imported soybean: Imported soybean price is steady today, among which Russian soybean is unchanged at 4150 yuan/tonne from yesterday. China's market is propped up when imported and distributed soybean in Tianjin port is small and US soybean import is restricted amid the escalation of U.S.-China trade conflicts. However, the market is still under the negative situations that it's off-season period and the soybean supply globally is ample. The Brazilian soybean output estimate for Year 2018/19 by Conab is up by 54,000 tonnes to 115,072,000 tonnes. The market is mixed and short-term prices likely maintain stable.

Cottonseed: Cottonseed prices today are flat and partially up 0.08 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 upward potential is curbed because the cottonseed trading is not much as oil mills are reluctant to purchase due to poor crush margin. Short-term price is likely to fluctuate greatly. Buyers are suggested to make a small replenishment upon low price.

Summary: U.S. soybean futures surged last night, as dryer conditions were increasingly severe in production regions and traders covered their short positions ahead of the USDA report. Oil futures climb further higher on the Dalian Commodity Exchange today, led by soybean oil. This can be attributed to substantial fund inflow into oil futures as buyers are stocking up packing oil in the run up for festivals, while industrial products broadly tumble under the background of trade war, and soybean meal market is hit by the African swine fever. In spot markets, soybean oil follows to jump higher by 90-180 yuan/tonne and palm oil by 80-100 yuan/tonne, and the total trading is tepid as buyers remain cautious in driving up prices. The trade war keeps escalating after a report from Bloomberg that the White House is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies. The import cost for soybean and oils has increased due to rises of premiums and freights of South American soybeans after the RMB exchange rate fell below 7. And soybean oil is seeing reducing output under lower operation rate due to the upcoming typhoon, while its delivery is increasing as the market is busy stocking up for two festivals. And palm oil inventory is also decreasing. Therefore, short-term oil spot market is expected to maintain its strong trend. The fund inflow is the main push in this round, and this can in turn oscillate the market. With huge arrivals of soybean palm oil at port in the coming two months, the market will probably post some fluctuations, which may be aggravated by profit taking. A myriad of fundamentals do bode well for a bullish market, but participants still need to remain cautious when following the price rises on the back of futures and to keep good control of positions.  

 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,800-6,080 yuan/tonne in domestic coastal areas, up by 90-180 yuan/tonne. (Tianjin 5,820-5,830, Rizhao 5,800, Zhangjiagang 6,080, and Guangzhou 6,000). 

Palm oil: 24-degree palm oil is mainly priced at 4,610-4,710 yuan/tonne in coastal areas, up by 80-100 yuan/tonne. (Tianjin 4,680-4,690, up 80; Rizhao 4,710, up 90; Zhangjiagang 4,650, up 100; Guangzhou 4,610, up 90; and Xiamen not offered).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 80-100 yuan at 7,110-7,250 yuan/tonne in coastal areas. (Fujian and Guangdong not offered; and Guangxi 7,250, up 100). It is a long way ahead for trade talks between Beijing and Washington, whilst there is no any practical progress between Beijing and Ottawa; hence, rapeseed supply is in a tight prospect. Besides, buyers are now stocking up packing oil in the market at full swing, sending the trading volume of crude rapeseed oil to reach around 10,000 tonnes in East China yesterday. Therefore, rapeseed oil market will probably keep strong. But rapeseed oil has seen its price rises smaller than soybean oil as its demand is influenced by the price gap between them. Buyers are suggested not to chase up price excessively for the moment. 

Cottonseed oil: Cottonseed oil today stays stable with a rise of 50-200 yuan/tonne, when operation rate and output are both low; massive fund inflows drive up oil futures, and today oils on DCE continue to rise strongly, led by soybean oil, spot soybean oil accordingly up 90-180 yuan/tonne as oil market is in a busy season of restocking for packing oil ahead of holiday compared with the soybean meal market restricted by ASF and the price fall across industrial products due to trade war. However, the market is weighted on by the limited consumption for cottonseed oil as blending oils. Short-term cottonseed oil is likely to go strong and buyers had better maintain proper stock level upon low price and be prudent if chasing high.