Today (Jan. 16), 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. Under the phase-1 trade deal which has been signed officially, China has committed to ramp up agricultural purchases from the U.S. by $12.5 billion and $19.5 billion respectively in 2020 and 2021, compared to a baseline of around $24 billion in 2017. An increase in soybean imports will be negative to domestic distributed market. But traders now have little supply in hand at ports, which still supports the distributed markets for imported soybeans. Overall, the market for imported soybeans will probably be little changed ahead of the Spring Festival. 

Cottonseed: Cottonseed price partially stays stable today, and most factories discontinue the purchase to consume inventory. Cottonseed supply is less under the impact of low operation rate, for which the cottonseed market is bolstered. However, the crush margin of cottonseed is poor, and oil mills halt the operation and have a holiday successively with Spring Festival approaching, resulting in tepid trading. Thus, the cottonseed market is weighed down. It is predicted that cottonseed price will mainly keep steady before holiday, so buyers can take a wait-and-see attitude.

Summary: China and the U.S. officially signed the trade deal in Washington last night, but they did not announce specific volumes by commodity, except the total purchase amount. Therefore, traders remained skeptical about whether China would boost purchases of U.S. soybeans in the face of bumper crop in South America. US soybean declined last night despite the signing of the deal. Meanwhile, the National Oilseed Processors Association (NOPA) reported larger-than-expected U.S. soybean oil stocks. Therefore, US soybean and soybean oil futures both fell last night. Moreover, BMD palm oil futures declined yesterday on lower-than-expected exports and concerns over diplomatic spat between Malaysia and India. Sources said that India broke some 100,000 tonnes of Malaysian palm oil in contract, and turned to buy from Indonesia. And oil futures also extend losses on the Dalian Commodity Exchange today. In the spot markets, soybean oil goes down by 30-100 yuan/tonne and palm oil partially fluctuates by 10-20 yuan/tonne, both in tepid trading. China has committed to ramp up U.S. agricultural purchases by $12.5 billion and $19.5 billion respectively in 2020 and 2021, compared to a baseline of around $24 billion in 2017. The total agricultural purchases will be $80 billion over the two years. To realize such a sharp increase, soybean imports from the U.S. are bound to surge, with some foreign media reporting that the amount may exceed 40 million tonnes in 2020. Hence, soybean crush in China will be kept at a high level. As Malaysia saw improved production and lower-than-expected exports in the first half of January, oil futures continue to go downside on the DCE today. This round of declines has gone larger than forecast, and some participants even said that oil prices have already hit the peak. It is still not the time to judge whether the oil market has reversed the trend, but participants are suggested to strengthen the risk aversion. Buyers can wait for low and stable prices to make replenishment in small batch.

Soybean oil: GB Grade I soybean oil is mainly priced at 6960-7140 yuan/tonne in domestic coastal areas, a decline of 30-100 yuan/tonne. (Tianjin traders 6960, Rizhao traders 7050, Zhangjiagang traders 7050, and Guangzhou traders 7120-7140). 

Palm oil: RBD palm olein is mainly priced at6480-6600 yuan/tonne in coastal areas, partially fluctuating by 10-20 yuan/tonne. (Tianjin traders 6580-6590, up 20; Rizhao traders 6600, flat; Zhangjiagang traders 6480, down 20; Guangzhou traders 6480-6490, up 10; and Xiamen yet offered). 

Imported rapeseed oil: Imported rapeseed oil declines in price today, of which it settles down 50-80 yuan at 7950-8250 yuan/tonne in coastal areas. (Fujian yet offered; Guangdong yet offered; and Guangxi yet offered.) Under the phase-1 trade deal which has been signed officially, China has committed to ramp up agricultural purchases from the U.S. by $12.5 billion and $19.5 billion respectively in 2020 and 2021, compared to a baseline of around $24 billion in 2017. The total agricultural purchases will be $80 billion over the two years. But they did not announce specific volumes by commodity, except the total purchase amount. Therefore, traders remained skeptical about whether China would boost purchases of U.S. soybeans in the face of bumper crop in South America. US soybean futures closed lower last night. Moreover, BMD palm oil futures also moved lower yesterday due to lower-than-expected exports and concern over diplomatic spats between Malaysia and India. Meanwhile, according to latest data by NOPA, US soybean oil stocks surged to 1.757 billion pounds by the end of December, so US soybean oil also fell last night. And oil futures continue to move lower on the Dalian Commodity Exchange today. But domestic mills now have low rapeseed and rapeseed oil stocks amid a stalemate between China and Canada. Therefore, rapeseed oil market is predicted to keep its strengthening trend, but the decline in the wake of futures may be larger than expected in the short term. Buyers can wait at the moment.

Cottonseed oil: Cottonseed oil price stays stable with several declines of 50 yuan/tonne today. The downstream demand for cottonseed oil as blending oil is limited, and oils on DCE today decline further with a drop of 30-100 yuan/tonne on the spot market. Both are dragging down cottonseed oil market. But cottonseed is pricey and cottonseed oil is out of stock in most factories. Moreover, oil mills successively halt the operation and have a holiday, so operation rate is trending down. Accordingly, the price declines of cottonseed oil are limited by these factors. Thus, short-term cottonseed oil market is predicted to fluctuate in a steady pace. On the other hand, the phase one trade deal has been officially signed by U.S. and China. Besides, due to the higher-than-expected production but lower-than-expected exports of Malaysian palm oil, bulk oils see a sharp pullback. In consequence, cottonseed oil market may be dragged down by these factors. Buyers can wait and see.