Today (Nov. 1), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybeans are priced steadily today, among which Canada soybean with 41% protein is unchanged at 3,980 yuan/tonne, and Ukraine soybean at 3,400 yuan/tonne. Chinese soybeans are in liberal supply at present. Although Chilean government announced to cancel the APEC summit in November, a spokesperson with China’s Ministry of Commerce said that Chinese and U.S. economic and trade teams have maintained close contact and are making smooth progress on the negotiations. And President Donald Trump also said a new location for signing the “phase one” U.S.-China trade deal will be announced soon. As bilateral relationship tends to a good prospect, China may buy more soybeans from the US later, which will be bearish to the domestic market. Overall, short-term market for imported soybeans will likely stay stable in the short term. 

Cottonseed: Cottonseed prices stay stable with some rises of 0.02-0.04 yuan/kg. There is a decrease in cottonseed production than a year earlier, so cotton ginning mills have a reluctant sale mentality. And oil plants scramble for cottonseed, which causes higher cottonseed prices. However, the rises of cottonseed price will be limited by increasing supply of Xinjiang cottonseed in the late period. Therefore, short-term cottonseed is predicted to rebound with fluctuations overall. Buyers can make replenishment on the dips to keep a safety inventory but not chase up prices too high.

Summary: US soybeans ended slightly higher last night due to strong export sales and shipment data, and oil futures fluctuate to move higher on the Dalian Commodity Exchange as traders take the arbitrage in buying oils. In the spot markets, soybean oil increases by 50-100 yuan/tonne, and palm oil by 20-90 yuan/tonne. Oil futures pare some gains in afternoon trading, and the trading is predicted to be tepid with some purchases on forward basis. Soybean oil stocks have been decreasing recently, and rapeseed oil stocks in coastal regions have also declined for two consecutive weeks in row. The market will stock up for the New Year’s Day and the Spring Festival this year earlier than usual. The surge in hog prices also send prices of animal oils higher, which is also good to the market of vegetable oils. In addition, the oil market has stepped on a strengthening trend thanks to a fund push which comes after a sharp cut in US soybean production and stocks and the inflation expectation due to the surging hog prices. Participants are bullish about the market prospects. However, DCE crush margins for imported soybeans go as high as 230-270 yuan/tonne, and DCE import margins also reach 50 yuan/tonne today for Argentine crude soybean oil whose duty-paid price is 6,230 yuan/tonne for November shipments. Hedgers have sent DCE soybean oil to break through 6,300 yuan/tonne today, but it has yet taken hold, so participants still need to pay attention to short-term fluctuation risks. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,500-6,600 yuan/tonne in domestic coastal areas, up 50-100 yuan/tonne. (Tianjin traders 6,500, Rizhao traders 6,580, Zhangjiagang traders 6,600, and Guangzhou traders 6,570). 

Palm oil: RBD palm olein is mainly priced at 5,230-5,430 yuan/tonne in coastal areas, mostly up 20-90 yuan/tonne. (Tianjin traders5,390-5,400, up 20; Rizhaotraders5,430, up 70; Zhangjiagang traders 5,370, up 90; Guangzhou traders 5,230, up 50; and Xiamen5,300, flat).

Imported rapeseed oil: Imported rapeseed oil rises in price today, of which it settles up 50-70 yuan at 7580-7730 yuan/tonne in coastal areas. (Fujian 7,630, up 50; Guangdong yet offered; and Guangxi 7,730, up 80). Rapeseed supply is tightening in China as there is no sign of a thaw in its relationship with Canada. Mills now are stalling on the sales as soybean oil and rapeseed oil stocks are declining. And the surging hog prices have sent the prices of vegetable oils higher on the back of animal oils, while at the same time, made investors go long in agricultural products due to an inflation expectation. Therefore, rapeseed oil market is able to keep its strong trend. But the demand for rapeseed oil is still subdued by its big price gap with soybean oil. Besides, China and the US are making smooth progress on their negotiations, and President Donald Trump said a new location for signing the “phase one” U.S.-China trade deal will be announced soon, although Chilean government announced to cancel the APEC summit. Chinese mills now are scooping up on soybeans due to good crush margins on the DCE. And Argentine crude soybean oil and Canadian rapeseed oil also post some import margins. Hence, rapeseed oil market may see frequent fluctuations when rising. Buyers are suggested not to chase after excessively high prices. 

Cottonseed oil: Cottonseed oil price stays stable with some rises of 100-150 yuan/tonne today. Factories have a good delivery situation and no cottonseed oil stock, and oil mills in Xiajin halt the operation due to environmental protection today. Besides, oils on DCE today go up with fluctuations due to an arbitrage of buying oils and selling meals. Spot soybean oil up by 50-100 yuan/tonne, and spot palm oil up by 20-90 yuan/tonne. Thus, cottonseed oil market is supported by these factors above. Additionally, the bottom of agricultural futures is raised by inflation expectations due to a surge in pig prices. Therefore, oils market outlook is bullish, and cottonseed oil prices may keep trending up with fluctuations. Buyers can maintain safety inventory on the dips but not chase up prices too high.