Today (Jun 1), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Soybean stocks have markedly increased at domestic ports and will continue the rise with more vessels from South America this month, including Brazil, Argentina and Uruguay. But the market is in tepid trading as downstream buyers lack of enthusiasm. Short-term imported soybean market may still remain weakening. Sanctions on China announced by US President Donald Trump did not mention economy or trade activities, nor did it damage bilateral phase one trade deal, but whether an escalation in bilateral tensions will impact China’s purchases of US soybeans still remains to be seen.
Cottonseed: Cottonseed prices are up 0.01-0.05 CNY/kg today. The supply of cottonseed is decreasing and tightening continually, raising traders’ selling reluctance. But crushing mills force price down to take a purchase due to the profit losses. Moreover, with the forthcoming wheat harvest, many inland oil mills reduce the operation rate and are wary of purchasing cottonseed. Therefore, the price of gross cottonseed delivered from Xinjiang to inland factories will not decline in a short term and likely fluctuate to stay strong.
Oils:
Summary: U.S. President Donald Trump said in a press last Friday that his administration would revoke special treatment on Hong Kong, take necessary steps to sanction both Chinese and Hong Kong officials who were directly or indirectly involved in eroding Hong Kong’s autonomy, bar Chinese graduate students with potential military ties from studying the U.S., and investigate into Chinese firms listed in the U.S.. No economic sanctions or trade activities was mentioned in the announcement, nor did it jeopardize the phase one trade deal between the two nations. The severity of this sanction was below the market forecast, so U.S. stock markets rapidly rallied after his speech. U.S. soybean futures just edged lower on last Friday. The foreign exchange rate of CNY also moved significantly higher, and rise above 7.13 today. Oil futures continue their gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 10-50 CNY/tonne and palm oil up 40-60 CNY/tonne. The consumption of bulk oil and packaged oil gets accelerated as colleges and schools open gradually. Besides, Malaysia’s palm oil production is expected to decline in May, and there is still uncertainty in relations between China and the US. Hence, short-term oil market is predicted to keep range-bound with a rising trend. However, soybean arrivals at domestic ports will hit an average of over 10 mln tonnes between June and August, and soybean crush still stayed at a high level of 2.07 mln tonnes last week, so that soybean oil stocks rose by 5% to 930,000 tonnes. The market is in a cautious mood now. Participants are suggested to to balance buying and selling, and avoid risk of fluctuations in the wake of continuous rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5690-5820 CNY/tonne in domestic coastal areas, a rise of 10-50 CNY/tonne. (Tianjin traders 5750; Rizhao traders 5740; Zhangjiagang traders 5830; and Guangzhou traders 5780-5800).
Palm oil: RBD palm olein is mainly priced at 5080-5260 CNY/tonne in coastal areas, up 40-60 CNY/tonne. (Tianjin traders 5200-5220, up 50; Rizhao traders 5260, up 60; Zhangjiagang traders 5160, up 40; Guangzhou traders 5070-5080, up 50; and Xiamen not available).
Imported rapeseed oil: U.S. President Donald Trump said in a press last Friday that his administration would revoke special treatment on Hong Kong, bar Chinese graduate students with potential military ties from studying the U.S., and investigate into Chinese firms listed in the U.S.. No economic sanctions or trade activities was mentioned in the announcement, nor did it jeopardize the phase one trade deal between the two nations. The severity of this sanction was below the market forecast, so U.S. stock markets rapidly rallied after his speech. U.S. soybean futures just edged lower on last Friday. The foreign exchange rate of CNY also moved significantly higher, and rise above 7.13 today. Rapeseed oil futures move further higher on the Zhengzhou Commodity Exchange today. Spot rapeseed oil goes up 80 CNY/tonne to settle at 7370-7520 CNY/tonne in coastal regions in thin trading. China and Canada are in souring tensions as Huawei’s Meng Wanzhou did not get released. Besides, China is also in an uncertain relation with the US. Overall, rapeseed oil market is predicted to stay at the high level. However, soybean imports are huge and soybean crush remains high, while the demand for oils is still tepid under the pandemic, so rapeseed oil market has seen no deal for days as buyers are cautious.
Cottonseed oil: Cottonseed oil prices increase by 50-150 CNY/tonne today. U.S. President Donald Trump at the press conference Friday pledged to “take action to revoke Hong Kong’s preferential treatment”, impose sanctions on Chinese officials involved in security laws directly or indirectly, ban Chinese graduate students considered with ties to the military entering U.S. and launch an investigation into Chinese firms listed in U.S.. But he did not mention any economic sanction or trade action and undermine phase one trade deal between the two countries. As the severity of sanctions was lower than market expectations, U.S. stocks rapidly rose from low levels after Trump’s speech. US soybean futures only posted a slight decline on Friday. Also, the Chinese Yuan rebounded sharply and exceeded 7.13 against the dollar in offshore. Besides, oils on Dalian Commodity Exchange continue rising today. On the spot market, soybean oil up by 10-50 CNY/tonne and palm oil up by 40-60 CNY/tonne. And the operation rate among oil mills is trending down with the upcoming wheat harvest. Adding that, the cost remains high. Thus, these factors are bullish for cottonseed oil market. However, the operation rate among soyoil mills will stays at high level in later period amid huge arrival of soybean. Thus, buyers are lack of enthusiasm in purchasing, and there are only few new orders of cottonseed oil. It is expected that short-term cottonseed oil may fluctuate to rebound under the boost of bulk oils.
(USD $1=CNY ￥7.13)
