Today (Jun 10), 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 in turn helps underpin the prices there. However, downstream customers do not totally accept high prices and tend to stay on the sidelines. There is only some rigid demand in the market now, so soybean shipments are fairly general. Moreover, Brazilian soybeans are high in stocks, and 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 stay stable and increase by 0.03 CNY/kg in individual regions 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 plants reduce the operation rate on account of wheat harvest and profit losses, so 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 fell on Tuesday on a quick planting pace. U.S. soybean crops were 86% planted and 67% emerging, both faster than last year and the five-year average. On China’s Dalian Commodity Exchange today, soybean oil futures are moderately higher but still stay below the previous close, and palm oil futures post relatively bigger gains. In the spot markets, soybean oil partially goes down 20-50 CNY/tonne and palm oil fluctuates by 10-30 CNY/tonne. The trading is predicted to be tepid for spot markets, but relatively better on low forward basis. Although China’s monthly soybean imports are forecast to top 10 mln tonnes between June and August, soybean oil stocks have a smaller-than-expected growth as its market has been in strong trading. In addition, Malaysia’s palm oil exports post a sharp rise recently as the country announced to lower down export duties and on the demand from India. Malaysia’s palm oil exports rose by 59.5-61.7% month on month in the first half of June, according to shipping agencies. And data from MPOB showed that its May crude palm oil production is 1.65 mln tonnes, exports 1.37 mln tonnes and stocks 2.03 mln tonnes. The carryover stocks in Malaysia declined on the back of higher-than-forecast exports and lower-than-forecast production. Participants had expected a sharp rise in palm oil inventories, so that such a surprising report is also a support for the market. In addition, U.S. stock markets and global crude oil prices are also rallying, which will also help the spot oils markets to maintain a strengthening trend. But oil futures on the DCE are slowing down gains today, which may affect the trading volume.
Soybean oil: GB Grade I soybean oil is mainly priced at 5800-5940 CNY/tonne in domestic coastal areas, a partial decline of 20-50 CNY/tonne. (Tianjin traders 5800-5820; Rizhao traders 5800; Zhangjiagang traders 5940; and Guangzhou traders 5920-5940).
Palm oil: RBD palm olein is mainly priced at 5320-5460 CNY/tonne in coastal areas, fluctuating by 10-30 CNY/tonne. (Tianjin traders 5400, up 10; Rizhao traders 5460, down 30; Zhangjiagang traders 5380, down 30; Guangzhou traders 5320-5340, down 10; and Xiamen not available).
Rapeseed oil: While U.S. soybean futures closed further lower on Tuesday on favorable weather conditions, rapeseed oil futures extend gains on the Zhengzhou Commodity Exchange today. Spot rapeseed oil goes 10 CNY at 7580-7700 CNY/tonne in coastal regions in thin trading. China’s rapeseed and rapeseed oil imports from Canada are small due to strained bilateral relations. And market participants are also worried about the implementation of phase one trade deal amid escalating tensions between China and the United States. Besides, many countries have set to ease lockdown tensions, so that the consumption of oils is recovering. Malaysia’s palm oil exports rose by 60% month on month in the first half of June, and its May inventory is also much lower than the forecast. China's soybean oil stocks are just mounting at a slower-than-expected pace. These all help support the market. However, China’s soybean arrivals at ports are expected to surpass a monthly average of 10 mln tonnes between June and August, and weekly soybean crush also maintains at a high level. Besides, buyers are cautious in rapeseed oil market as rapeseed oil prices are much higher than that of soybean oil and palm oil. Overall, rapeseed oil is predicted to stay at the high prices but in thin trading.
Cottonseed oil: Cottonseed oil prices keep steady with several rise of 50 CNY/tonne today. Soybean oil on Dalian Commodity Exchange moderately goes up today. And adding the low operation rate and excessive cost among oil plants, cottonseed oil market is bolstered. Moreover, seeing over 10 mln tonnes of soybean arrivals each month from June to August, soybean crush is projected to be upwards of 2 mln tonnes in the coming two weeks. It raises market concerns over the bear news and affects buyers’ enthusiasm in purchasing. And there are only few new orders of cottonseed oil. In addition, Malaysian palm oil exports have soared by 60% in early June, leading to lower-than-expected inventories. Furthermore, U.S. stocks and global crude oil keep recovering, which will offer support to bulk oils. It is predicted that cottonseed oil market may continue fluctuating to stay strong.
(USD $1=CNY ￥7.10)
