Today (Nov. 8), 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. Domestic soybeans are in adequate supplies. China’s Ministry of Commerce confirmed that China and US agreed to cancel the additional tariffs in different phases, so China may increase its soybean imports later, which is negative to domestic market. But traders now see steady demand in the market and turn to stay on the sidelines. 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 price stays stable with several declines of 0.04 yuan/tonne today. Oil mills remain wary of purchasing due to the high and irregular price of Xinjiang cottonseed, so the trading volume is limited, which leads individual prices to fall back. But factories have no inventory of cottonseed oil and cottonseed meal, while mills need to buy cottonseed for processing amid many orders waiting for delivery. Therefore, the declines of cottonseed price will be limited, but the price still goes up with fluctuations overall. Buyers can make proper replenishment upon low and stable prices.

Summary: US soybean exports rose by 92% from the previous week, including 956,300 tonnes of sales bound for China; China’s Ministry of Commerce confirmed that China and US agreed to cancel the additional tariffs in different phases; and the market was expecting some cuts in US soybean production and stocks in the USDA report on Friday night. US soybean futures rose last night. 

But the thaw in trade disputes is bearish to domestic market. The import cost of soybean and soybean oil are lower as Chinese yuan keep rising below 6.98, and the crush margins of soybeans stay at a high level of 220-272 yuan/tonne on the Dalian Commodity Exchange, so mills are keen on imports now. In addition, investors sharply reduced positions in palm oil yesterday after previous huge rises, so palm oil is the leading loser today, and soybean oil also declined in early trading but then fluctuate to rebound. In the spot markets, soybean oil steadily sees a partial loss of 10 yuan/tonne and palm oil mostly drops by 10-40 yuan/tonne in tepid trading. 

Importers now have to pay the 33% duties for US soybeans imports first in order to get cargoes unloaded, which may delay the customs clearance. Mills are keeping relatively low soybean crush, and buyers will stock up oils for festivals earlier as the Spring Festival will come earlier this year, so soybean oil stocks keep declining. In addition, there is a cut in US soybean production and an inflation expectation in China. The oil market is predicted to follow futures to fluctuate in the short term and remain bullish in the middle to long run. Buyers can wait for low and stable prices to make moderate replenishment

Soybean oil: GB Grade I soybean oil is mainly priced at 6,600-6,670 yuan/tonne in domestic coastal areas, a partial decline of 10 yuan/tonne. (Tianjin traders 6,600-6,610, Rizhao traders 6,670, Zhangjiagang traders 6,660, and Guangzhou traders 6,630--6,650). 

Palm oil: RBD palm olein is mainly priced at 5,320-5,520 yuan/tonne in coastal areas, mostly down 10-40 yuan/tonne. (Tianjin traders 5,490-5,500, down 40; Rizhao traders 5,520, down 10; Zhangjiagang traders 5,420, down 30; Guangzhou traders 5,320, down 20; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil steadily fluctuates in price today, of which it fluctuates by 10 yuan at 7,520-7,620 yuan/tonne in coastal areas. (Fujian 7,520; Guangdong yet offered; and Guangxi 7,950). For at least several months, rapeseed supply will still be tightening in China, because imports will take some time for even if China and Canada see a thaw in bilateral relationship. Mills in China now are propping up prices on account of declining soybean oil and rapeseed oil stocks. But the demand for rapeseed oil is influenced by its huge price gap with soybean oil. The market remains cautious in going long after China resumed beef and pork imports from Canada. Rapeseed oil will largely fluctuate at the narrow range, and buyers can make some replenishment after this round of declines. 

Cottonseed oil: Cottonseed oil price stays stable with some rises of 50-100 yuan/tonne today. The cottonseed oil market is supported by no cottonseed oil stock and fewer spot goods, coupled with high price of cottonseed. But the Chinese Commerce Ministry said China and U.S. have agreed to roll back tariffs in phases with the pact going on, so U.S.-China relations have further eased, which is bearish for domestic market. Moreover, RMB also appreciates continually even to 6.98, which helps reduce the import costs of soybean oil. Today, spot soybean oil stays stable with some declines of 10 yuan/tonne and spot palm oil mostly drops by 10-40 yuan/tonne, which may limit the rises of cottonseed oil prices. And the upward trend of short-term cottonseed oil may be affected. However, it is about to enter a peak season for stocking up before the festival, along with U.S. Soybeans production cuts and inflation expectations, so cottonseed oil market outlook is expected to maintain an upward trend with fluctuations.