Today (Jun 3), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: PNW soybean supply are centralized in the hand of very few traders at China’s ports, market sources said. And it is unlikely to find other supplies of U.S. soybeans at present, which buoys PNW soybean prices to bounce fractionally at ports. However, soybean stocks are high 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. And Brazilian soybean prices are weak at China’s ports now, which is negative to imported soybean market. In a hybrid of the bull and the bear, short-term soybean market is predicted to keep range-bound.
Cottonseed: Cottonseed prices are stable with partial rise of 0.02 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, the wheat harvest has just begun in Shandong, so 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 rose on Tuesday as private exporters sold 132,000 tonnes of U.S. soybeans to China and on competitive exports due to falling exchange rate of U.S. dollar since mid-May as well as a stronger Brazilian Real. As the Southern Peninsular Palm Oil Millers Association estimated Malaysia production in May to fall 5.6% from the month before, palm oil futures rise in a broad range on China’s Dalian Commodity Exchange today and soybean oil futures also follow to move higher. In the spot markets, soybean oil goes up 20-60 CNY/tonne and palm oil up 90-110 CNY/tonne. Both markets are predicted to see tepid spot trading, and soybean oil still attracts purchases on low basis.
The market is expecting higher demand from India, as the country is to ease its lockdown restrictions by phase from June 8, and palm oil exports in producing countries are predicted to improve further in June. And in China, palm oil stocks also remain low, which bolsters palm oil to be the best performer. China’s soybean arrivals at ports will hit a monthly average of more than 10 mln tonnes between June and August and its oil mills are keeping very high soybean crush at present, but soybean oil stocks are just under moderate pressure, and palm oil and rapeseed oil stocks are also low. Besides, the market can also be easily affected by any development between China and the United States. Hence, traders now will not easily go short. Overall, the oil market is predicted to stay in a strengthening trend in the short run, but it is still necessary to strengthen risk prevention after consecutive rises.
Soybean oil: GB Grade I soybean oil is mainly priced at 5780-5870 CNY/tonne in domestic coastal areas, a rise of 20-60 CNY/tonne. (Tianjin traders 5810; Rizhao traders 5780; Zhangjiagang traders 5870; and Guangzhou traders 5890-5910).
Palm oil: RBD palm olein is mainly priced at 5160-5270 CNY/tonne in coastal areas, up 90-110 CNY/tonne. (Tianjin traders 5270, up 90; Rizhao traders not available; Zhangjiagang traders 5250, up 110; Guangzhou traders 5160, up 100; and Xiamen not available).
Rapeseed oil: U.S. soybean futures closed sharply higher on Tuesday as the U.S. Department of Agriculture confirmed sales of U.S. soybeans to China. Rapeseed oil futures also move higher higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil goes up 60 CNY/tonne to settle at 7430-7570 CNY/tonne in coastal regions in thin trading. China and Canada are in souring tensions as Huawei’s Meng Wanzhou did not get released. And Malaysia’s May palm oil carryover stocks will also go below the forecast due to lower production estimates, so palm oil futures on the Bursa Malaysia Derivatives Exchange are bolstered to go strengthening, which is also a boost to rapeseed oil market. However, 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. 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. U.S. private exporters sold 132,000 tonnes of U.S. soybeans to China. And the USD has been falling since mid-May, while the BRL steadily climbs, which is favorable for exporting U.S. soybeans. And U.S. soybean futures rose last night. Besides, SPPOMA expects that Malaysian palm oil production declines by 5.6% in May, leading to an easing of inventory pressure. In consequence, palm oil on Dalian Commodity Exchange broadly goes up today, and soybean oil follows it to move higher. On the spot market, soybean oil up by 20-60 CNY/tonne and palm oil up by 90-110 CNY/tonne. Moreover, the operation rate among cottonseed crushing mills continues going down as the wheat harvest in Shandong has begun successively. 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 ￥7.11)
