Today (Nov. 5), the market for oilseeds and oils in China is shown as follows:

 

 

Imported soybean: Imported soybeans keep steady today, among which Kazakhstan soybean is unchanged at 4,160 yuan/tonne, and Ukraine soybean at 3,500 yuan/tonne. Some soybean grades are of lower stocks at present, which helps support the market. But domestic soybeans are in adequate supplies, and 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 0.01-0.15 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. Besides, the cottonseed oil prices are buoyed to surge by a thick capital speculation atmosphere in the oils market at present. Therefore, cottonseed market is predicted to gradually rise overall. Buyers can make replenishment on the dips.

 

 

Summary: US soybean futures are slightly higher last night. Palm oil futures soar on the Dalian Commodity Exchange today, as investors continue going long on the dips on intensifying worries about dry weather in production regions, sending its domestic open interest to directly and rarely surpass that of soybean oil, and soybean oil is also driven substantially higher. In the spot markets, soybean oil and palm oil increase by 100-160 yuan/tonne today, and the total trading is predicted to be tepid as buyers remain cautious. Apart from the strong push by funds, the fundamentals of oils are also turning for the better. On one hand, some mills now have to suspend production. On the other, soybean oil is trading very strongly with its stocks dropping 4.4% to 1.257 mln tonnes last week and its outstanding contracts increasing by 8% to 1.36 mln tonnes. Besides, the Spring Festival will come earlier this year, so the market will stock up oils for festivals earlier. Mills are calling for higher prices, so the oil market is predicted to maintain its strengthening trend. But DCE margins for soybean crush have expanded to 240-290 yuan/tonne so far, so mills are importing soybeans and booking profits through meal and oil sales, which makes oils pare some earlier gains. 

 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,650-6,700 yuan/tonne in domestic coastal areas, up 100-140 yuan/tonne. (Tianjin traders 6,650-6,660, Rizhao traders 6,730, Zhangjiagang traders 6,700, and Guangzhou traders 6,650). 

 

Palm oil: RBD palm olein is mainly priced at 5,410-5,590 yuan/tonne in coastal areas, up 120-160 yuan/tonne. (Tianjin traders 5,580-5,590, up 140; Rizhao traders 5,590, up 160; Zhangjiagang traders 5,540, up 120; Guangzhou traders 5,410, up 140; and Xiamen yet offered).

 

Imported rapeseed oil: Imported rapeseed oil surges in price today, of which it settles up 100-130 yuan at 7730-7800 yuan/tonne in coastal areas. (Fujian 7,730, up 130; Guangdong yet offered; and Guangxi 7,950). There is no sign of a thaw in relationship between China and Canada, so rapeseed supply is still tightening in China. In addition, soybean oil and rapeseed oil stocks are also declining, which also supports the prices to sharply rebound. With upbeat sentiment in the market, the overall oil prices will extend the strengthening trend. But the demand for rapeseed oil is still affected by its big price gap with soybean oil. In addition, Chinese mills are importing soybeans due to good crush margins on the DCE, and as China and the US are making smooth progress in negotiations. This is still the major uncertain factor to the market. 

 

Cottonseed oil: Cottonseed oil prices increase by 100-200 yuan/tonne today. Factories have a good delivery situation and no cottonseed oil stock, and cottonseed prices continue to be pulled up. Besides, dry weather in the palm oil belt has raised concerns about reduction of production. And funds continue to bull the market, which pushes up soaring prices of domestic palm oil futures. Meanwhile, the open interest rarely surpasses soybean oil, which leads oils on DCE to increase sharply. Spot soybean oil and palm oil rise by 100-160 yuan/tonne. Thus, all these factors boost cottonseed oil market, and cottonseed oil price is predicted to maintain a upward trend. Buyers can maintain safety inventory on the dips.