Today (Jun 11), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: The supply of PNW soybeans at Shandong ports is highly concentrated at present, which in turn props up prices there. However, downstream customers choose to stay on the sidelines, so there is only rigid demand in the market now and soybean shipments are not at a quick pace. Moreover, port Brazilian soybeans are of high stocks and relatively weakening spot prices. In addition, soybean vessels from Argentina and Uruguay are to arrive at ports late this month, which can replace PNW soybeans. And 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 0.02-0.03 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. Consequently, the delivered price of Xinjiang cottonseed to inland goes up. 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. And some traders reduce the price. 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 edged higher on Wednesday on continuing purchasing by China. But Malaysia’s palm oil output might increase by about 30% month on month in the first half of June, and India is considering to raising edible oil import taxes, so oil futures decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil mostly declines by 20-50 CNY/tonne and palm oil partially down 10-20 CNY/tonne. Buyers become cautious on the back of the decline on the DCE, so the market is predicted to be in tepid trading. China’s monthly soybean imports are forecast to top 10 mln tonnes between June and August, and weekly soybean crush will again exceed 2 mln tonnes this week, which are also bearish to the market. However, soybean oil has been in good demand and its stocks are only about 950,000 tonnes at present, so oil mills still tend to prop up prices. And Brazilian soybean premiums rose by 15 cents last night amid a tightening supply outlook, which significantly raises cost of importing soybeans. And for Chinese buyers, palm oil is not lucrative at the moment, so domestic palm oil stocks also remain at a low level. With easing concerns over the coronavirus, global crude oil and U.S. stock markets are going strengthening. All these are underpinning the oil market. Overall, short-term oil market is predicted to have limited downside space and to stay on a strengthening trend.
Soybean oil: GB Grade I soybean oil is mainly priced at 5750-5910 CNY/tonne in domestic coastal areas, mostly down 20-50 CNY/tonne and a partial rise of 10 CNY/tonne. (Tianjin traders 5790-5810; Rizhao traders 5750; Zhangjiagang traders 5900; and Guangzhou traders 5910).
Palm oil: RBD palm olein is mainly priced at 5330-5450 CNY/tonne in coastal areas, a partial decline of 10-20 CNY/tonne. (Tianjin traders 5380-5410, down 20; Rizhao traders 5450, down 10; Zhangjiagang traders 5360, down 20; Guangzhou traders 5330, flat; and Xiamen not available).
Rapeseed oil: U.S. soybean futures closed fractionally higher on Wednesday, and rapeseed oil futures extend gains on the Zhengzhou Commodity Exchange today. Tensions are sourcing between China and Canada as well as the United States, and China’s domestic consumption has recovered at a brisk pace, which help support rapeseed oil market. However, Malaysia’s palm oil output rose by 30% month on month in the first half of June, and India plans to hike edible oil import taxes. Besides, 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 has been at a very high level. Hence, buyers are cautious now. Overall, rapeseed oil is predicted to stay at the high prices but in thin trading.
Cottonseed oil: Cottonseed oil prices keep steady today. The cost remains too high, boosting cottonseed oil market. However, seeing over 10 mln tonnes of soybean arrivals each month from June to August, soybean crush is projected to bounce back to above 2 mln tonnes this week. Besides, Malaysian palm oil production in early June will likely rise 30% compared with the same period in May, and India may raise import tariff. Oils on Dalian Commodity Exchange decline today. On the spot market, soybean oil mostly down by 20-50 CNY/tonne and palm oil partly down by 10-20 CNY/tonne. These raise market concerns over the bear news and affects buyers’ enthusiasm in purchasing. And there are only few new orders of cottonseed oil. In addition, U.S. stocks and global crude oil move higher with the fears about COVID-19 easing, which offers support to bulk oils. It is predicted that cottonseed oil market may continue fluctuating to stay strong.
(USD $1=CNY ￥7.10)
