Today (May 26), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Port soybean stocks have increased by a large margin, while the market is in tepid trading 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. Short-term imported soybean market may still have downside potential on bearish fundamentals. Besides, China threatened counter-measures against the U.S. after the latter said it would make sanctions against the former for passing a national security law over Hong Kong issue. Participants can keep an eye on whether this will have an impact on the implementation of the phase one trade deal between these two countries.
Cottonseed: Cottonseed prices are stable 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 soybean crush set a record high of 2.09 mln tonnes last week, leading to a consecutive rise in inventory of soybean oil and soybean meal. Being depressed by this, 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. markets were closed Monday in observance of Memorial Day. Oil futures narrow down gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil mostly goes up 10-60 CNY/tonne and palm oil fluctuates by 10-50 CNY/tonne, attracting some low-level purchases. The Trump administration said it will impose sanctions against China if Beijing enacts the national security law over Hong Kong, and China’s Ministry of Foreign Affairs responded that China will have to take all necessary measures to fight back. Meanwhile, the US has added more Chinese high-tech enterprises to its “entity list”. Hence, participants are concerned about the implementation of the phase one trade deal. In addition, the coronavirus pandemic is still severe in Brazil. Besides, weekly palm oil stocks have fallen by 3% to 430,000 tonne. Short-term oil market is predicted to follow futures to keep range-bound and moderately rebound. However, monthly soybean imports will exceed an average of 10 mln tonnes between May and August in China, and its weekly soybean crush hit a fresh high of 2.09 mln tonnes last week; hence, soybean oil output will continue rising. Moreover, the demand for oils are still tepid as catering businesses have not resumed normal operations. This may limit the upward space of oil market and adds to its fluctuations. Participants need to keep good balance of buying and selling.
Soybean oil: GB Grade I soybean oil is mainly priced at 5490-5610 CNY/tonne in domestic coastal areas, a rise of 10-60 CNY/tonne. (Tianjin traders 5490; Rizhao traders 5510; Zhangjiagang traders 5610; and Guangzhou traders 5520-5530).
Palm oil: RBD palm olein is mainly priced at 4820-5000 CNY/tonne in coastal areas, fluctuating by 10-50 CNY/tonne. (Tianjin traders 4980, up 10; Rizhao traders 5000, down 10; Zhangjiagang traders 4950, up 50; Guangzhou traders 4820-4850, flat; and Xiamen 4980, up 10).
Imported rapeseed oil: U.S. markets were closed Monday in observance of Memorial Day. Oil futures post moderate gains on the DCE, but rapeseed oil futures swing to decline 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, in thin trading. China’s monthly soybean imports will surpass an average of over 10 mln tonnes between May and August, and its soybean crush hit a new high last week. In the week ending May 22, soybean oil stocks increased by 2.4% to 880,000 tonnes nationwide, and rapeseed oil stocks rose by 3.8% to 177,000 tonnes in coastal regions. China threatened counter-measures against the U.S. after the latter said it would make sanctions against the former for passing a national security law over Hong Kong issue. Traders keep increasing the amount of risk premium on souring US-China relations, so that oil futures swing to rebound on the DCE. Moreover, rapeseed oil stocks still stay at a low lever, which also helps support the market. Overall, short-term rapeseed oil prices may remain high and volatile. Besides, a decision on the trial over whether Huawei Technologies Chief Financial Officer Meng Wanzhou will be announced on May 27. If the double criminality standard not convicted, Meng will be released in court. If so, it will help improve the relationship between China and Canada. Canadian media forecast a high probability for Meng to win, and participants can keep it in focus.
Cottonseed oil: Cottonseed oil prices stay stable today. Oils on Dalian Commodity Exchange rise today, and spot soybean oil mostly up by 10-60 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. 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 still fluctuate to adjust. Buyers can buy on immediate demand.
(USD $1=CNY ￥7.13)
