Today (Jun 4), 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, but port soybean stocks still remain at a high level. Moreover, vessels from Argentina and Uruguay are expected to arrive at domestic ports very soon. In addition, China is still purchasing US soybeans. Hence, port stocks will mount further higher later. Meantime, downstream buyers show little enthusiasm now so that imported soybean market is in tepid trading. These are bearish to the imported soybean market. Overall, short-term soybean market is predicted to keep range-bound with a weakening trend. Besides, U.S. President Donald Trump’s administration said it would bar Chinese passenger flights from flying into America from June 16, which add to the uncertainty between these two countries, so participants can keep focusing on relevant developments.
Cottonseed: Cottonseed prices are stable with a rise of 0.04-0.05 CNY/kg in individual regions today. The supply of cottonseed is decreasing and tightening continually, raising traders’ selling reluctance. But the wheat harvest has just begun in Shandong, so many inland oil mills reduce the operation rate. And they are wary of purchasing cottonseed due to losses in crush margins. 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 Wednesday on improving export prospect, as Brazilian Real bounced, U.S. dollar went weakening and China was purchasing U.S. soybeans. Oil futures fall on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil declines by 20-90 CNY/tonne and palm oil mostly down by 10-40 CNY/tonne. Soybean oil traded nearly 100,000 tonnes yesterday, most of which was on forward basis. The trading is predicted to be smaller today as buyers prefer to stay on the sidelines due to the decline on the DCE. China’s soybean arrivals at ports will hit a monthly average of more than 10 mln tonnes between June and August, and oil mills are maintaining very high operation rates, hence, soybean oil stocks will keep increasing. In addition, the market forecasts that Malaysia’s May palm oil inventory could surge by 8.3% month-on-month to 2.22 mln tonnes, the highest level since last November. Therefore, China’s oil market is weighed down to fluctuate to adjust today. However, U.S. President Donald Trump’s administration said it would bar Chinese passenger flights from flying into America from June 16, so traders now will not easily go short as tensions could get escalating between these two countries at any time. Overall, short-term oil market will have limited downside space and may keep range-bound with a strengthening trend. Participants are suggested not to chase after excessively high spot prices, but to make appropriate replenishment on low basis.
Soybean oil: GB Grade I soybean oil is mainly priced at 5740-5850 CNY/tonne in domestic coastal areas, a decline of 20-90 CNY/tonne. (Tianjin traders 5750; Rizhao traders 5740; Zhangjiagang traders 5820; and Guangzhou traders 5850).
Palm oil: RBD palm olein is mainly priced at 5150-5300 CNY/tonne in coastal areas, mostly down 10-40 CNY/tonne. (Tianjin traders 5230-5260, down 30; Rizhao traders 5300, down 40; Zhangjiagang traders 5250, flat; Guangzhou traders 5150-5160; and Xiamen not available).
Rapeseed oil: U.S. soybean futures closed further higher on Wednesday, and rapeseed oil futures fluctuate to rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil stays stable at 7430-7570 CNY/tonne in coastal regions in thin trading. China’s rapeseed and rapeseed oil imports from Canada remain limited, and its palm oil and soybean oil stocks are also low, both of which help bolster 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. Due to tensions between China and the U.S., short-term rapeseed oil prices are predicted to remain resilient and stay at a high level.
Cottonseed oil: Cottonseed oil prices mainly keep steady and fluctuate by 50 CNY/tonne in some regions today. The operation rate among cottonseed crushing mills continues going down as the wheat harvest in Shandong has begun successively. And the costs are still high. Accordingly, cottonseed oil market is buoyed by these factors. But oils on Dalian Commodity Exchange stop rising and start falling today. On the spot market, soybean oil down by 20-90 CNY/tonne and palm oil mostly down by 10-40 CNY/tonne. Besides, seeing over 10 mln tonnes of soybean arrivals each month from June to August, the operation rate is super high and soybean oil stocks increase gradually. Thus, buyers are lack of enthusiasm in purchasing, and there are only few new orders of cottonseed oil. Likewise, Chinese airlines are banned from flying to the United States from June 16, and tensions between the two countries could inflame at any time on account of anything. It is expected that cottonseed oil market will not drop in a short term and likely continue fluctuating strongly.
(USD $1=CNY ￥7.10)
