Today (Nov. 4), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybeans keep steady with some rises today, among which Kazakhstan soybean is unchanged at 4,160 yuan/tonne, and Ukraine soybean is priced higher by 100 yuan at 3,500 yuan/tonne. Some soybean grades are of lower stocks at present, which helps support the market. Chief leaders for trade negotiations from China and the United States had a phone conversation last Friday and reached a consensus in principle, and both sides also talked about the arrangements for next round of negotiations. According to Reuters, U.S. Secretary of Commerce said that the initial “phase one” trade pact with China was likely to be signed around mid-November. With smooth progress in talks with the US, China may increase its soybean imports later, which is negative to domestic market. In a hybrid of a bull and a bear, short-term market for imported soybeans will likely stay stable in the short term. 

Cottonseed: Cottonseed prices rise by 0.02-0.12 yuan/kg today. 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 quotation is consistent with a market speculation atmosphere. 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: Chief leaders for trade negotiations from China and the United States had a phone conversation last Friday and reached a consensus in principle, and U.S. Secretary of Commerce said that the initial “phase one” trade pact with China was likely to be signed around mid-November. US soybean futures edged higher last Friday. And oil futures also continue to move higher on the Dalian Commodity Exchange today. In the spot markets, soybean oil increases by 20-30 yuan/tonne, and palm oil posts a partial rises of 20 yuan/tonne. And there will be some low-level purchases, but few at high levels. Domestic soybean crush declined by 11% last week due to supply shortages, in addition to strong trading, soybean oil stocks thus dropped by 4.4% to 1.257 mln tonnes. The outstanding contracts of soybean oil also increased by 8% to 1.36 mln tonnes. Besides, the market will stock up oils for the New Year’s Day and the Spring Festival this year earlier than in the previous years. Mills are calling for higher prices due to better fundamentals, so the oil market is predicted to maintain its strengthening trend. But DCE soybean crush margins still stay at a level of 210-260 yuan/tonne in spite of some declines, and DCE import margins is over 50 yuan/tonne today for Argentine crude soybean oil whose duty-paid price is 6,260 yuan/tonne for November shipments. But there is news that the Brazilian government is to implement the blend of B20 in 2020, which sends Brazilian soybean oil premiums to increase by 50 points (0.05 cent/lb) for December shipment. Participants can keep an eye on whether this will drive up Argentine soybean oil prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,520-6,620 yuan/tonne in domestic coastal areas, up 20-30 yuan/tonne. (Tianjin traders 6,520-6,530, Rizhao traders 6,560, Zhangjiagang traders 6,620, and Guangzhou traders 6,590). 

Palm oil: RBD palm olein is mainly priced at 5,220-5,430 yuan/tonne in coastal areas, a partial rise of 20 yuan/tonne. (Tianjin traders 5,420; Rizhaotraders5,430, flat; Zhangjiagang traders 5,370, flat; Guangzhou traders 5,220, up 20; and Xiamen yet offered).

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 10-30 yuan at 7,570-7,700 yuan/tonne in coastal areas. (Fujian 7,600, down 30; Guangdong yet offered; and Guangxi 7,700, down 30). The demand for rapeseed oil is influenced by its big price gap with soybean oil and other oils. And China and the US are making smooth progress in negotiations. And Chinese importers are buying up on soybeans due to good crush margins on the DCE. But rapeseed oil stocks declined by 3.3% to 438,000 tonnes last week. And China’s imports of rapeseed oil and rapeseed from Canada are still disrupted by bilateral pending issues. Before the settlement of the issues, rapeseed supply will be tightening in China. Therefore, rapeseed oil market will not easily move lower and will maintain its strengthening trend at the high level. 

Cottonseed oil: Cottonseed oil prices stay stable with a rise of 100-150 yuan/tonne. Factories have a good delivery situation and no cottonseed oil stock. Meanwhile, the fundamentals of staple oils improve, and oils on DCE today continue to move higher. Spot soybean oil rises by 20-30 yuan/tonne, and spot palm oil partially rises by 20 yuan/tonne. Thus, cottonseed oil market is supported by these factors, and cottonseed oil price is predicted to keep trending up with fluctuations. Buyers can maintain safety inventory on the dips but not chase up prices too high. In addition, lead trade negotiators from both U.S. and China made a phone call and reached “consensus on principles” last Friday. The “Phase One” trade pact is likely to be signed around mid-November, U.S. Commerce Secretary Wilbur Ross said. And buyers can keep close eye on the latest progress in U.S.-China trade talks.