Today (Dec. 31), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybeans steadily fall today, among which Kazakhstan soybean goes down by 40 yuan to 4,260 yuan/tonne and Canadian soybean is unchanged at 4,180 yuan/tonne. A foreign report said that Chinese Vice Premier Liu He has accepted the invitation to visit the US this Saturday, and White House economic advisor said that the phase 1 trade deal with China could possibly be signed around next week. In addition, China’s Ministry of Agriculture approved one new genetically modified crop for import, which could boost soybean imports from the US. Overall, the market for imported soybeans will probably keep steady with a slight decline in the short term. 

Cottonseed: Cottonseed prices stay stable with some rises of 0.02 yuan/kg. There is not much spot cottonseed, and some traders with goods in hand are reluctant to sell them. Thus, the market supply is tight, which bolsters the cottonseed market. However, due to the inconsiderable crush margin, oil mills are a little bit wary of purchasing cottonseed, and the trading volume is limited. Therefore, the cottonseed price is curbed. 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 but not chase up prices too high.

Summary: White House economic advisor said that the phase 1 trade deal with China could possibly be signed around next week. China’s Ministry of Agriculture approved one new genetically modified crop for import and renewed extra 10 import permits, which would hopefully boost soybean imports from the US. Therefore, US soybean futures rose last night. Oil futures continue to move higher yet at a slower pace on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil post a partial rise of 20-50 yuan/tonne in tepid trading. Palm oil futures remain strong on the return of India’s purchases and expectations for a sharp reduction in production in Southeast Asia. Moreover, bulk oil is still in tight supplies in China, and soybean oil is transported from the northern regions to the South. Therefore, oil market is bolstered to extend its strong pattern. But soybean imports are arriving at ports substantially this month. Meanwhile, soybean crush was raised to 1.99 mln tonnes last week and is forecast to stay at the high level of 2.0 mln tonnes in both the coming two weeks. And the festival demand for packing oils is drawing to a close, and soybean oil stocks have increased by 2% weekly to 920,000 tonnes and edible palm oil stocks has risen by 2% to 740,000 tonnes. Besides, China and the United States are reported to sign the trade deal very soon, so it is necessary to avoid risks of fluctuations in the short term. Buyers are suggested to wait if with adequate stocks and not to chase after excessively high prices. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6970-7180 yuan/tonne in domestic coastal areas, a rise of 20-80 yuan/tonne. (Tianjin traders 6970-6980, Rizhao traders 7090, Zhangjiagang traders 7180, and Guangzhou mills 7350and traders 7160-7170).

Palm oil: RBD palm olein is mainly priced at 6520-6580 yuan/tonne in coastal areas, a partial rise of 30-40 yuan/tonne. (Tianjin traders 6580-6590, up 30; Rizhao traders 6620, up 40; Zhangjiagang traders 6550, flat; Guangzhou traders 6540, up 30; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil keeps stable in price today, of which it settles at 7890-8180 yuan/tonne in coastal areas. (Fujian 7890; Guangdong yet offered; and Guangxi 8180.) Rapeseed oil stocks are small due to low operation rates as rapeseed supply is tightening amid tensions between China and Canada, and speculation is still in the palm oil market, which help support rapeseed oil to maintain its strengthening pattern. But soybean imports are arriving at ports substantially this month, and soybean crush will stay at an extremely high level in the coming two week. Moreover, oil shipment has slowed down as the festival demand for packing oils is drawing to a close, so both soybean oil and palm oil stocks have increased. Besides, funds are booking profits in oils as meal futures rebound on festival demand. Overall, rapeseed oil market is likely to fluctuate to adjust in the short term, and buyers can wait at the moment. 

Cottonseed oil: Cottonseed oil price stays stable with some rises of 100-150 yuan/tonne today. The price of cottonseed remains high, and the turnover of some manufacturers goes better. Besides, oils on Dalian Commodity Exchange today extend the rally, and partial spot soybean oil and palm oil up by 20-50 yuan/tonne. Hence, cottonseed oil market is bolstered. But the downstream demand for cottonseed oil as blending oil is limited. The bull news leads the market, so short-term cottonseed oil market is expected to fluctuate to stay strong. Additionally, as the upward momentum of oils futures slow today, buyers had better not chase up prices too high.