Today (Jan. 2), the market for oilseeds and oils in China is shown as follows:

 

Imported soybean: Imported soybeans steady today, among which Kazakhstan soybean is unchanged at 4,260 yuan/tonne and Canadian soybean at 4,180 yuan/tonne. Donald Trump said that the phase 1 trade deal with China would be signed on January 15th at the White House, and he would “at a later date” to start talks toward a second part of the trade deal. Market participants expect that a good prospect in bilateral relationship will boost soybean imports later. Overall, the market for imported soybeans will probably keep steady with a slight decline in the short term. 

Cottonseed: Cottonseed price stays stable with several declines of 0.03 yuan/tonne today. The crush margin is not good. And some enterprises halt the operation due to the environmental warning in Shandong, so manufacturers are a little bit wary of purchasing cottonseed. Thus, the trading volume is limited, which drags down the market. However, spot cottonseed is in short supply, and some traders with goods in hand are reluctant to sell the cottonseed. In consequence, the supply of cottonseed in market is tight, limiting the price declines of it. And cottonseed price is expected to move sideways in the near term. Buyers with inventory in hand can take a wait-and-see attitude.

Summary: Reuters reported that Donald Trump said that the phase 1 trade deal with China would be signed on January 15th at the White House, and he would “at a later date” to start talks toward a second part of the trade deal. US soybean rose on Tuesday. But following the collapse in palm oil on BMD due to profit taking, oil futures reverse the upward trend to fall on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil post a partial decline of 10-40 yuan/tonne, and the trading is tepid as buyers are mostly staying on the sidelines. A further detente in trade relationship between China and the US is negative to domestic market. Meanwhile, with many soybean cargoes arriving at ports, soybean crush will stay at a high level of over 2.0 mln tonnes in both next two weeks. And as the festival demand for packing oils is drawing to a close, both soybean oil and palm oil have seen slightly higher stocks. Moreover, the speculation of lower palm oil production is hanging over the market, and funds may easily cut their positions on a large scale if the production reduction or export fails to meet the expectation. Oil market may follow futures to fluctuate and adjust in the short term, but it is predicted that there will be little space for adjustments and the overall market will stay in the strong pattern. Buyers with stocks can stay on the sidelines at the moment. 

Soybean oil: GB Grade I soybean oil is mainly priced at 6950-7170 yuan/tonne in domestic coastal areas, a partial decline of 10-40 yuan/tonne. (Tianjin traders 6950-6960, Rizhao traders 7050, Zhangjiagang traders 7170, and Guangzhou traders 7120). 

Palm oil: RBD palm olein is mainly priced at 6530-6610yuan/tonne in coastal areas, a partial decline of 10-30 yuan/tonne. (Tianjin traders6590-6600, down 20; Rizhao traders 6600-6610, down 10; Zhangjiagang traders 6550, flat; Guangzhou traders6530, down 30; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil keeps stable with slight declines in price today, of which it settles down 10-20 yuan at 7860-8160yuan/tonne in coastal areas. (Fujian 7860; Guangdong yet offered; and Guangxi 8180.) The operation rates for soybean have been rising in recent weeks, which will send the crush to stay at a high level of 2.0 mln tonnes in both next two weeks. And as festival demand for packing oils is drawing to a close, both soybean oil and palm oil saw lower stocks last week. In addition, China and the United States will very soon sign the phase 1 trade deal, which could boost China’s purchases of US agricultural products. Therefore, rapeseed oil market has been dragged down. But rapeseed stocks are also lower amid a stalemate between China and Canada, and funds are still going long in oils. The overall rapeseed oil market is predicted to keep its strengthening pattern, but it is necessary to avoid risks of short-term fluctuations. Buyers can wait at the moment.

Cottonseed oil: Cottonseed oil price stays stable with some rises of 50-200 yuan/tonne today. Cottonseed is pricey, and some manufacturers limit or stop production due to the inspection of environmental protection. With the high cost and low output, cottonseed oil market is supported. But the downstream demand for cottonseed oil as blending oil is limited. Additionally, oils on DCE today stop rising and fall back, and partial soybean oil and palm oil dip by 10-40 yuan/tonne. Thus, the price rises of cottonseed oil may be restricted. And short-term cottonseed oil market is predicted to fluctuate. As bulk oils pare gains, buyers had better not chase up prices too high.