Today (Jun 9), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: PNW soybeans are highly concentrated in the hand of very few traders at Shandong port, which helps underpin PNW soybean prices there. However, downstream customers do not totally accept high prices. Moreover, Brazilian soybeans are high in stocks and thus weakening in prices. In addition, soybean vessels from Argentina and Uruguay are to arrive at ports late this month, which can replace PNW soybeans. Besides, China is still purchasing US soybeans. Hence, soybean supply will further increase at ports. In a hybrid of the bull and the bear, short-term soybean market is predicted to keep range-bound.
Cottonseed: Cottonseed prices steadily increase by 0.02-0.04 CNY/kg today. The supply of cottonseed is decreasing and tightening, so traders are reluctant to sell them. Besides, it is hard to reduce the freight from Xinjiang to inland due to lack of vehicles. In consequence, the delivered price of Xinjiang cottonseed to inland is boosted. But crushing mills reduce the operation rate and suffer from losses in crush margins. And there are not many new orders, seeing light trading. Therefore, the price of gross cottonseed delivered from Xinjiang to inland factories will likely fluctuate to stay strong in a short term.
Oils:
Summary: U.S. soybean futures settled lower on Monday as disappointing export data triggered technical selloff and US soybean planting reached 86%, far above the 54% last year and 74% of the five-year average. On China’s Dalian Commodity Exchange today, oil futures swung lower in early trading, but rally sharply toward the midday as investors buy the dips. In the spot markets, soybean oil goes up 20-50 CNY/tonne and palm oil up 80-120 CNY/tonne. The trading is predicted to be tepid for spot markets, but relatively better on forward basis in soybean oil market. China’s monthly soybean imports will surpass an average of 10 mln tonnes between June and August, and weekly soybean crush is also predicted to exceed 2 mln tonnes in coming two weeks. Despite this, some oil mills have to halt production due to swelling soybean meal inventories and temporary soybean shortages, so soybean crush declined by 7% to 1.92 mln tonnes last week. Soybean oil stocks thus only increase by 18,000 tonnes to 950,000 tonnes this week, and soybean oil traded well for a sixth straight day at more than 50,000 tonnes yesterday. These have greatly enhance the market confidence. In addition, Indonesia has cut the cost assumption of converting palm oil into biodiesel by 20% to 80 USD/tonne, which is favorable to put down expenditures in oil palm subsidies and also reflect the country’s resolution to roll out B30. Palm oil futures are very strong on the DCE today, and investors are rushing to book profits by buying oils and selling meals. Overall, the oil market is predicted to follow futures to maintain a strengthening trend in the short run.
Soybean oil: GB Grade I soybean oil is mainly priced at 5780-5990 CNY/tonne in domestic coastal areas, a partial rise of 20-50 CNY/tonne. (Tianjin traders 5860; Rizhao traders 5780; Zhangjiagang traders 5940; and Guangzhou traders 5960-5990).
Palm oil: RBD palm olein is mainly priced at 5290-5450 CNY/tonne in coastal areas, up 80-120 CNY/tonne. (Tianjin traders 5380-5390, up 80; Rizhao traders 5450, up 120; Zhangjiagang traders 5370, up 110; Guangzhou traders 5290, up 80; and Xiamen not available).
Rapeseed oil: U.S. soybean futures closed lower on Monday on disappointing export data. But oil futures on the DCE and rapeseed oil futures on the Zhengzhou Commodity Exchange today all quickly rally toward the midday. Spot rapeseed oil surges 100-120 CNY at 7570-7690 CNY/tonne in coastal regions in thin trading. There is a myriad of bullish factors in the oil market now, including tensions between China with Canada and the United States, and the increase in consumption. Meanwhile, soybean oil stocks do not go higher as quickly as expected. However, China’s soybean arrivals at ports are expected to surpass a monthly average of 10 mln tonnes between June and August. And buyers are cautious in rapeseed oil market as rapeseed oil prices are much higher than that of soybean oil and palm oil, so the market has seen no deal for days. Overall, rapeseed oil is predicted to stay at the high prices but in thin trading.
Cottonseed oil: Cottonseed oil prices keep steady today. Oils on Dalian Commodity Exchange fluctuate to fall in the morning session, but sharply pull up at noon due to large purchase on the dips. On the spot market, soybean oil partly up by 20-50 CNY/tonne and palm oil up by 80-120 CNY/tonne. Besides, the operation rate among cottonseed crushing mills stays at low levels and cottonseed price continues moving higher, boosting cottonseed oil market. Moreover, seeing over 10 mln tonnes of soybean arrivals each month from June to August, soybean crush is predicted to be upwards of 2 mln tonnes in the coming two weeks. It raises market concerns over the bad news and affects buyers’ enthusiasm in purchasing. And there are only few new orders of cottonseed oil. It is expected that cottonseed oil market will likely continue fluctuating to stay strong.
(USD $1=CNY ￥7.10)
