Today (Dec. 27), 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 and Canadian soybean at 4,180 yuan/tonne. Imported soybean supply to distribution markets remains scanty at ports and traders are in fair shipments, which is good to the market. But China is forecast to boost purchases of US agricultural products after both sides reach the phase 1 trade deal, so soybean imports may increase later. In a hybrid of the bull and the bear, the market for imported soybeans will probably keep steady in the short term. 

Cottonseed: Cottonseed price stays stable with several rises of 0.02 yuan/tonne today. There is not much spot cottonseed available for sale on the market, and Xinjiang oil mills continue to replenish the stock. Also, ranchers are stocking up cottonseed ahead of the holiday. Thus, these factors bolster the cottonseed market. However, due to the inconsiderable crush margin and the halt of operation, oil mills are a little bit wary of purchasing cottonseed, and the trading volume is limited. Therefore, the upward space of cottonseed price is limited by these factors. It is predicted that the overall cottonseed still maintains a trend of fluctuating to go up, so buyers can make appropriate replenishment upon low prices.

Summary: US soybean rose last night on optimism about China-US trade. Malaysian Palm Oil Board estimated palm oil production decreases by 16% in the first 20 days of December, which was above the forecast, and Indonesia announced to levy 50 USD/tonne export duty on crude palm oil next two month, which would be favorable to boost Malaysia exports; therefore, palm oil futures surged on the Bursa Malaysia Derivatives Exchange yesterday. And oil futures all follow to post sharp gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil increases by 90-120 yuan/tonne and stands above the gap of 7,000 yuan/tonne in main ports and RBD palm olein up by 160-220 yuan/tonne. Buyer are cautious of high prices, so the trading is predicted to be lukewarm for spots, but with some purchases on low-level basis. The most-active contracts of RBD palm olein on DCE increases by 200,000 contracts in recent two weeks. Both futures and spots have again refreshed the new highs for this year under the push by funds speculators. Meanwhile, due to growing cost of imports, the crush is no more profitable on the DCE for both US and South American soybeans. Besides, bulk oils are in short supplies in some regions, and soybean stocks will probably fall to around 800,000 tonnes. The oil market is predicted to keep its strengthening trend during the replenishment for the festival, and buyers have to keep an eye on stocks level. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6910-7100 yuan/tonne in domestic coastal areas, a rise of 90-120 yuan/tonne. (Tianjin traders 6910-6920, Rizhao traders 7030, Zhangjiagang traders 7100, and Guangzhou mills 7300 and traders 7090-7100). 

Palm oil: RBD palm olein is mainly priced at 6460-6510 yuan/tonne in coastal areas, up 160-220 yuan/tonne. (Tianjin traders 6500, up 160; Rizhao traders 6510, up 190; Zhangjiagang traders 6500, up 220; Guangzhou traders 6460, up 160; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil steadily edges down in price today, of which it settles up 70-100 yuan at 7890-8180 yuan/tonne in coastal areas. (Fujian 7890; Guangdong yet offered; and Guangxi 8180.) Rapeseed supply is tightening in China, which can be attributed to tensions between China and Canada, so mills have to keep low operation rates. Moreover, soybean oil and rapeseed oil stock are decreasing in China, coupled with a forecast for lower palm oil production in top producing countries, so oil futures post another sharp rises on the DCE, and rapeseed oil spot prices are buoyed to move higher. Funds keep going long in oils, so the overall oil market is predicted to keep a strengthening trend. But due to huge rises recently, buyers are cautious and the trading is less.

Cottonseed oil: Cottonseed oil price stays stable with some rises of 50-200 yuan/tonne today. The cottonseed is pricey, and some oil mills halt operation due to inspection of environmental protection, so spot cottonseed oil gets tight. Besides, Malaysia Palm Oil Board (MPOB) predicts a higher-than-expected 16% drop in palm oil production in the first 20 days of December compared with the previous month. Also, Indonesia will raise export tax by 50 USD/tonne for crude palm oil from next month, which is favourable for the increase of Malaysian palm oil export and boosts a surge on BMD yesterday. Today, oils on DCE also follow to rise. Spot soybean oil rises by 90-120 yuan/tonne and even breaks the 7000 yuan/tonne mark at mainstream ports, while palm oil up by 160-220 yuan/tonne. However, the price rises of cottonseed oil are depressed by limited downstream demand for cottonseed oil as blending oil. Therefore, short-term cottonseed oil market is likely to fluctuate to stay strong. Buyers can maintain appropriate inventory on the dips but not chase up prices too high.