Today (May 25), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported PNW soybeans are quoted at 3900-3950 CNY/tonne at ports, down 200 CNY/tonne from last Friday. While soybean stocks have increased to a high level of around 100,000 tonnes at Shandong ports, there are very few deals signed as downstream buyers lack of enthusiasm. In addition, China’s monthly soybean imports will average nearly 10 mln tonnes from May to July, for Brazil’s exports still stay strong. Port traders have thus lowered down their quotes. Short-term imported soybean market may still have downside potential on bearish fundamentals.
Cottonseed: Cottonseed prices mainly keep steady with partial rise of 0.02 CNY/kg today. The supply of cottonseed is continually decreasing, and it still takes long time before new cottonseed comes into market, raising traders’ selling reluctance. And the high-priced cottonseed is mainly purchased by ranchers. But with a consecutive rise in inventory of soybean oil and soybean meal, the trading in cottonseed oil and cottonseed meal goes not well, so inland oil mills suffer from profit losses and force price down to take a purchase. Moreover, seeing low operation rate among inland oil mills, cottonseed trade is tepid. Therefore, the delivery price of Xinjiang gross cottonseed to inland factories will not decline in a short term and likely fluctuate to stay strong.
Oils:
Summary: U.S. soybean futures fell last Friday, as U.S. President Donald Trump warned that Washington would react "very strongly" if Beijing adhered to a new national security legislation for Hong Kong. Oil futures shrug off losses in early trading and swing to move higher on the Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil mostly go up by 30-90 CNY/tonne, attracting some low-level purchases. Domestic oil market has been a strong performer recently, which can be contributed to strained relations between China and the US as well as concerns over coronavirus pandemic in Brazil. In addition, Indonesia has announced to unveil subsidies for B30 blending mandate, and India has also resumed purchases of Malaysia’s palm oil. However, China’s weekly soybean crush hit a new high of 2.09 mln tonnes last week, and soybean oil stocks also rose by 2.4% to 890,000 tonnes in the week ending May 22nd. Moreover, China’s monthly soybean imports will surpass an average of 10 mln tonnes between May and August. And domestic demand oils is still dismal. Hence, soybean oil stocks may continue the uptrend. Participants may continue increasing risk premium on US-China relations, so short-term oil market will probably follow futures to fluctuate to rebound moderately, but the bearish fundamentals will add fluctuations to the market. It cannot be said that the oil market has buck the trend now in the absence of practical positive factors. Buyers are suggested to make appropriate replenishment on the dips and not to chase after excessive rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5490-5580 CNY/tonne in domestic coastal areas, a rise of 40-80 CNY/tonne. (Tianjin traders 5490; Rizhao traders 5500; Zhangjiagang traders 5580; and Guangzhou traders 5510-5520).
Palm oil: RBD palm olein is mainly priced at 4800-4990 CNY/tonne in coastal areas, mostly up 30-60 CNY/tonne. (Tianjin traders 4920, up 30; Rizhao traders 4990, up 80; Zhangjiagang traders 4900, up 50; Guangzhou traders 4800, up 90; and Xiamen not available).
Imported rapeseed oil: U.S. soybean futures fell last Friday on further strained US-China relations, and rapeseed oil futures swing to edge lower on the Zhengzhou Commodity Exchange today. Spot rapeseed oil drops by 10-20 CNY/tonne to settle at 7100-7250 CNY/tonne in coastal regions. Domestic oil mills have sharply picked up operation rates as monthly soybean imports will surpass an average of over 10 mln tonnes between May and August, so soybean crush hit a new high of 2.09 mln tonnes last week. Besides, overseas catering businesses are severely hit by the coronavirus pandemic, and domestic food services have not yet recovered to normal. In the week ending May 22, rapeseed oil stocks rose by 3.8% to 177,000 tonnes in coastal regions, and soybean oil stocks increased by 2.4% to 880,000 tonnes nationwide. However, China’s rapeseed crush has been staying at a low level, as China and Canada have been at a deadlock. The tight supply in the rapeseed oil market helps limit the decline. Therefore, traders may begin to increase risk premium on US-China relations, and short-term rapeseed oil will probably fluctuate with a strengthening trend at a high level.
Cottonseed oil: Cottonseed oil prices are stable with partial fluctuation of 50-100 CNY/tonne today. U.S. President Donald Trump warned that Washington would react “very strongly” if China sticks to impose the national security legislation on Hong Kong. Consequently, U.S. soybeans closed lower on Friday night. And oils on Dalian Commodity Exchange edged down in morning session but then fluctuated to go higher. Meanwhile, spot soybean oil and palm oil mostly up by 30-90 CNY/tonne. Besides, cottonseed price remains high and the operation rate stays at a low level. Thus, these factors are bullish for cottonseed oil market, and the price rises in some regions. But soybean crush hit a new record high of 2.09 mln tonnes last week. Likewise, with over 10 mln tonnes of soybeans arriving at ports each month from May to August, soybean oil stocks also increase by 2.4% to 890,000 tonnes this week. On the other hand, the demand for oils is poor amid the coronavirus pandemic, leading to tepid trade in cottonseed oil. It is predicted that short-term cottonseed oil market may fluctuate to adjust. Buyers can buy on immediate demand.
(USD $1=CNY ￥7.12)
