Today (Dec. 17), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybeans are stable today, among which Kazakhstan soybean is unchanged at 4,300 yuan/tonne. Imported soybean supply to distribution markets remains scanty at ports and traders are in fair shipments, which is good to the market. However, Argentine government boosted export tax for soybeans, soybean oil and soybean meal to 30% from about 25%. Moreover, China and the US have agreed on a phase-one trade deal, so China will likely increase soybean imports from the US substantially after the deal is signed. Overall, the market for imported soybeans will probably keep steady in the short term. 

Cottonseed: Cottonseed prices stay stable with some rises of 0.01-0.02 yuan/kg. There is not much spot cottonseed available for sale on the market and the supply is tight. Besides, the freight from Xinjiang to inland remains high for a shortage of vehicles. Thus, these factors boost the cottonseed market. However, factories have little shipping quantity of cottonseed oil and cottonseed meal. Meanwhile, China and U.S. have agreed on the text of phase one trade deal, which will sharply increase import of U.S. agricultural products. And oil mills are a little bit wary of purchasing cottonseed. Therefore, the price rises of cottonseed are curbed by these factors. It is predicted that the overall cottonseed will continue trending up with fluctuations. Buyers can maintain appropriate inventory on the dips but not chase up prices too high.

Summary: US soybean futures rallied on Monday on a positive prospect for improving exports, as China and the US agreed on a phase-one trade deal and Argentine government announced to hike export tax on soybean, soybean oil and soybean meal to 30% from 25%. Besides, an agency reported that Malaysia’s palm oil output fell sharply by 28% month on month in the first half of December. Therefore, oil futures still keep firm on the Dalian Commodity Exchange, led by soybean oil. In the spot markets, soybean oil increases by 70-100 yuan/tonne and palm oil by 60-130 yuan/tonne, but the trading is unsatisfactory as buyers remain cautious at current high prices. Mills are in smooth delivery with festival demand underway, so soybean oil stocks fell further by 4.6% weekly to 950,000 tonnes as of last Friday, and buyers still need to queue up for picking up goods in some areas. Meanwhile, soybean import cost is boosted by consecutive rises in US soybeans, and funds are still speculating on the estimates for a production reduction in palm oil in Southeast Asia. Therefore, oil market is predicted to keep its strengthening trend amid ongoing festival demand. But China will substantially increase imports of agricultural commodities like soybeans from the US after signing the trade deal. And domestic will raise operation rates due to good crush margins and tight soybean meal stocks. These will add to fluctuations in oil market in its upward trend, so participants need to keep good balance between sales and purchases. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6,790-6,950 yuan/tonne in domestic coastal areas, a rise of 70-100 yuan/tonne. (Tianjin traders 6,790-6,800, Rizhao traders 6,900, Zhangjiagang traders 6,950, and Guangzhou mills 6,930 and traders 6,860-6,880). 

Palm oil: RBD palm olein is mainly priced at 6,080-6,260 yuan/tonne in coastal areas, up 60-130 yuan/tonne. (Tianjin traders 6,240-6,250, up 60; Rizhao traders 6,220, up 90; Zhangjiagang traders 6,260, up 130; Guangzhou traders 6,080-6,100, up 60; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil goes up in price today, of which it settles up 30-40 yuan at 7610-7850 yuan/tonne in coastal areas. (Fujian 7,610, up 130; Guangdong yet offered; and Guangxi 7,820.) Rapeseed supply gets tightening subject to tensions between China and Canada, so mills are keeping low operation rates. In addition, domestic soybean oil stocks have been declining, and palm oil is still forecast to be in output reduction in production countries as an agency reported that Malaysia’s palm oil output plumped by 28% month on month in the first half of December. Therefore, spot rapeseed oil market moves higher, bolstered by further rises in oils futures on the DCE. But China will significantly increase agriculture products imports from the United States after signing the trade deal, and mills will pick up operation rate due to good crush margins and tight soybean meal stocks. In addition, a rumour said that following a trade deal between China and the US, Canada will seek to resume rapeseed exports to China. It is still necessary to prevent frequent fluctuations at high levels in the rapeseed oil market. Buyers are suggested to replenish for appropriate stocks on the dips and remain cautious in chasing after high prices. 

Cottonseed oil: Cottonseed oil price remains flat and partially rises by 50-100 yuan/tonne today. The price of cottonseed remains high, and factories in some regions halt the operation. Besides, a report found that the production of Malaysian palm oil plummeted by 28% month on month in the first half of December. Moreover, oils on DCE today keep firm, led by soybean oil. Spot soybean oil up by 70-100 yuan/tonne and spot palm oil up by 60-130 yuan/tonne. Hence, cottonseed oil market is bolstered by all these factors above. Due to the limited downstream demand for cottonseed oil as blending oil, there are not many actual transactions of some manufacturers, which will lead cottonseed oil to yet to up extensively. It is expected that short-term cottonseed oil may keep strong with fluctuations. Buyers can maintain appropriate inventory on the dips but not chase up prices too high.