Today (Oct. 12), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybean price is steady today, among which Canada soybean with 41% protein is unchanged from yesterday at 4350 yuan/tonne, and Myanmar soybean is unchanged from yesterday at 4450 yuan/tonne. The new round of China-U.S. high-level economic and trade consultations in Washington ended. Trump said on Friday that the U.S. agreed to hold off on tariff hikes that were set to take effect Tuesday. And China will purchase between $40 billion and $50 billion in U.S. agricultural products, and provide greater protection for intellectual property rights. Amid the better relationship between China and US, US soybean imports will increase. Add the marketing of China soybean and the market supply will increase. Short-term imported soybeans for distribution are likely to be steady with weak momentum.

Cottonseed: Cottonseed prices stay stable today. The cottonseed market is dragged down by increasing supply of new cottonseed and rising freight from Xinjiang to inland. But the trading volume of cottonseed increases with the up operation rate, which will support the price of Xinjiang cottonseed. The market price is a little bit changeable at present, but the declines may not be too much due to favorable crush margin. Besides, China and U.S. have made substantial progress in negotiation and reached “phase 1” trade deal, which may be negative to domestic market. Buyers can take a wait-and-see attitude.

Summary: Reports by foreign media said that China and the US had reached a preliminary trade deal. The US would suspend a new round of tariffs on $250 billion worth of Chinese imports, which were set to go into effect on Oct. 15th. And China was said to agree to purchase $40 billion to $50 billion worth of U.S. agricultural products, before which the annual purchases were recorded at $29 billion. US soybeans closed sharply higher last night on the substantial progress in trade negotiations. But in the after-hour trading on the Dalian Commodity Exchange last night, the most active soybean oil contract closed lower by 34 yuan/tonne at 5,976 yuan/tonne and palm oil down by 66 yuan/tonne at 4,734 yuan/tonne, and the DCE is closed today. In the spot markets, soybean oil is down 30-50 yuan/tonne and palm oil down 40-70 yuan/tonne with light trading. Domestic oil market has huge supplies now, and palm oil imports remain substantial in the coming two months due to lucrative margins. Besides, US farmers are about to harvest their soybeans and put them on the market, and China and the US have reached the phase one deal. Therefore, oil futures may fall early next week. Short-term oil market is predicted to fluctuate to drop to adjust in the short term, but the downside space may be limited as the import cost of soybean will increase with higher US soybean prices under the bullish USDA report. Buyers can wait for the Exchange to open next week. 

Soybean oil: GB Grade I soybean oil is mainly priced at 5,970-6,130 yuan/tonne in domestic coastal areas, some down by 30-50 yuan/tonne. (Tianjin traders 5,970-5,980, Rizhao traders 6,020, Zhangjiagang traders yet offered, and Guangzhou traders 6,040). 

Palm oil: RBD palm olein is mainly priced at 4,690-4,880 yuan/tonne in coastal areas, down 40-90 yuan/tonne. (Tianjin traders 4,800, down 70; Rizhao traders 4,880, down 40; Zhangjiagang traders yet offered; Guangzhou traders 4,690, down 90; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil remains basically stable in price today, of which it settlesat 7,360-7,480 yuan/tonne in coastal areas. (Fujian yet offered; Guangdong yet offered; and Guangxi 7,470). It is little likely that China and Canada will solve their issues very soon, so rapeseed supply is tightening and rapeseed oil price gets buoyed. But domestic oil market has huge supplies now and the price difference is bigger between rapeseed oil and soybean oil and palm oil. This has affected the demand for rapeseed oil, sending its stocks to increase a little bit to 90,000 tonnes in coastal regions as of this Friday. Rapeseed oil futures may drop next Monday on the progress in US-China trade negotiations, and buyers can wait for the moment. 

Cottonseed oil: Cottonseed oil price stays stable with several declines of 50 yuan/tonne today. The supply of cottonseed oil is increasing with a rise of operation rate. And current domestic oils are in ample supply, while the demand gradually into an off-season, so the consumption of cottonseed oil  as blending oil is limited. Besides, China and U.S. have cut a preliminary trade deal that U.S. would suspend tariffs on $250 billion in Chinese goods on Oct. 15, and China will purchase $40-$50 billion in U.S agricultural products, foreign media reported. Before then, China purchased U.S. agricultural products at the annual highest record of $29 billion. Due to a detente in trade war, oils on DCE ended lower overnight and are closed today. Spot soybean oil and palm oil partially drop by 30-70 yuan/tonne. Therefore, short-term cottonseed oil may fall back with fluctuations, and buyers can take a wait-and-see attitude.