Today (Jun 2), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Soybean stocks keep increasing at China’s ports, and will mount further higher as vessels sailing from Argentina and Uruguay are expected to arrive in June. Meantime, downstream buyers show little enthusiasm now so that imported soybean market is in tepid trading. Port traders are not confident in propping up prices and have slightly lowered down their quotes, which is negative to the market. In the context of oversupply, China’s imported soybean market still has some downside potential in the short run.
China told major state-run agricultural companies to pause purchases of some American farm goods including soybeans, and Chinese buyers have also canceled an unspecified number of U.S. pork orders, according to a report by Bloomberg on Monday. But the news is still not confirmed. And also on Monday, China’s state-owned firms bought at least 3 cargoes of US soybeans, according to Reuters. Participants can continue to keep an eye on China’s purchases of US soybeans.
Cottonseed: Cottonseed prices are stable and up 0.04 CNY/kg in individual regions 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. soybean futures closed further lower on Monday. Amid tensions with Washington, Beijing told major state-run agricultural companies to pause purchases of some U.S. farm goods including soybeans, and Chinese buyers have also canceled an unspecified number of U.S. pork orders, according to a report by Bloomberg on Monday. But the news is still not officially confirmed so far. And also on Monday, China’s state-owned firms bought at least 3 cargoes of US soybeans, according to Reuters. Oil futures swing slightly higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil partially fluctuate by 10-50 CNY/tonne, and the trading today is not as good as that of yesterday.
Malaysia’s palm oil exports saw a month-on-month increase of 7-8% in May, according to shipping agencies. And in the meantime, its production might have declined. Hence, Malaysia’s palm oil carryover stocks in May will likely get lower than the forecast. Moreover, India is set to ease its lockdown restrictions by phase from June 8, so the market is awaiting to see its higher demand. And in China, schools are opening in staggered stages, so the consumption of bulk oils and packaged oils are increasing. Overall, short-term oil market is predicted to maintain its strengthening trend. But China’s soybean arrivals at ports are expected to surpass a monthly average of 10 mln tonnes between June and August, and its soybean crush remains at a very high level. DCE oil futures have slowed down rises today, so it’s necessary to avoid risk of short-term fluctuations in the wake of continuous rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5730-5830 CNY/tonne in domestic coastal areas, partially fluctuating by 10-50 CNY/tonne. (Tianjin traders 5760; Rizhao traders 5730; Zhangjiagang traders 5830; and Guangzhou traders 5830).
Palm oil: RBD palm olein is mainly priced at 5070-5270 CNY/tonne in coastal areas, a partial decline of 10-20 CNY/tonne. (Tianjin traders 5200, up 10; Rizhao traders 5270, flat; Zhangjiagang traders 5160, down 20; Guangzhou traders 5070-5080, down 10; and Xiamen not available).
Rapeseed oil: U.S. soybean futures extended slight losses on Monday. China told major state-run agricultural companies to pause purchases of some U.S. farm goods including soybeans, according to a report by Bloomberg on Monday. But the news is still not officially confirmed so far. And also on Monday, China’s state-owned firms bought at least 3 cargoes of US soybeans, according to Reuters.
Rapeseed oil futures swing to adjust on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil goes down 10 CNY/tonne to settle at 7360-7510 CNY/tonne in coastal regions in thin trading. China’s soybean arrivals at ports are expected to surpass a monthly average of 10 mln tonnes between June and August, and its weekly soybean crush maintains a high level of over 2 mln tonnes. In the context of lukewarm demand amid the pandemic, rapeseed oil market has seen no deal for days as buyers are cautious. But China and Canada are in souring tensions as Huawei’s Meng Wanzhou did not get released. And China is also in an uncertain relation with the US. Overall, rapeseed oil market is predicted to stay at the high level and remain in thin trading.
Cottonseed oil: Cottonseed oil prices keep steady with partial rise of 50-100 CNY/tonne today. China has ordered major state-run firms to pause some purchase of farm goods from the United States, including soybeans, due to the tensions between U.S. and China, Bloomberg News reported on Monday. But the news has not been officially confirmed. Moreover, Chinese state-owned firms still bought at least three cargoes of U.S. soybeans on Monday night. And U.S. soybeans dropped further overnight. But oils on Dalian Commodity Exchange fluctuate to rise slightly today. Besides, the operation rate among oil mills is trending down with the upcoming wheat harvest. Adding that, the costs are still high. Thus, cottonseed oil market is buoyed by these factors. However, seeing over 10 mln tonnes of soybean arrivals each month from June to August, soybean crush still stays at extremely high level. 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 continue fluctuating to rebound.
(USD $1=CNY ￥7.12)
