Today (Jun 15), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Prices are not available at Shandong ports today due to the inspection on soybean flow by commodity authorities. PNW soybeans are highly concentrated at domestic ports now. However, Brazilian soybeans are at high stocks, and downstream customers now lack of enthusiasm and stay on the sidelines, so there is only rigid demand in the market and port shipments are not at a quick pace. In addition, soybean vessels from Argentina and Uruguay are to arrive at ports later this month, which can replace PNW soybeans. And China is still purchasing US soybeans. Hence, soybean supply will further increase at ports. After the inspection, port soybean market is predicted to still trade at a narrow range.

Cottonseed: Cottonseed prices stay stable but fluctuate by 0.02 CNY/kg in some regions. 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, cottonseed price is boosted by these factors. 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 cut the price of Xinjiang cottonseed. 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 rallied last Friday, as China was said to have purchased 4-5 cargoes of soybeans out of PNW for Oct-Dec deliveries. Oil futures edge higher on China’s Dalian Commodity Exchange (DCE) this morning. In the spot markets, soybean oil increases by 10-50 CNY/tonne, and palm oil fluctuates by 20-30 CNY/tonne, both in tepid trading. China purchased a total of 28-30 cargoes of soybeans last week, and its monthly soybean imports are forecast to top 10 mln tonnes between June and August. And also last week, soybean crush rose 7% from previous week to 2.05 mln tonnes, and weekly crushing is expected to go to a record high of above 2.1 mln tonnes in coming two weeks. These are all bearish to the oil market. However, weekly soybean oil stocks in China only increase by 0.7% to 956,000 tonnes this week, which was smaller than the forecast. In addition, domestic palm oil also fell by 6.4% weekly to 352,000 tonnes. Moreover, the demand from China, India and the EU will boost palm oil exports in main producing countries, where the output is growing seasonally, so top exporter Malaysia will see limited increase in its accumulated stocks for next few months. And premiums of Brazilian soybean keeps rising due to tight supplies, so that its prices are higher than U.S. soybean now. Brazilian soybean crushings are at loss in China now if calculated on DCE oil and meal prices, and Chinese importers even re-sold 2 cargoes soybeans to local crushers in Brazil last Friday. Besides, tensions between China and the U.S. and the weather conditions for US soybean crops could become a hotspot in the market at any time. The oil market is predicted to maintain a strengthening trend. But DCE oil futures trade downside in afternoon trading amid a cautious sentiment, as buyers are worried a second wave of the COVID-19 outbreak since new cases have been reported in Xinfadi agri-product wholesale market in Beijing. Buyers can wait for this round of declines to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5700-5860 CNY/tonne in domestic coastal areas, mostly up 10-50 CNY/tonne and a partial decline of 20 CNY/tonne. (Tianjin traders 5740; Rizhao traders 5700; Zhangjiagang traders 5860; and Guangzhou traders 5840). 

Palm oil: RBD palm olein is mainly priced at 5270-5340 CNY/tonne in coastal areas, partially fluctuating by 20-30 CNY/tonne. (Tianjin traders 5320, flat; Rizhao traders 5340, down 30; Zhangjiagang traders 5310, up 20; Guangzhou traders 5270, up 20; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed fractionally higher last Friday, and rapeseed oil futures open high to increase on the Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 50-150 CNY/tonne to 7780-7800 CNY/tonne in thin trading. Rapeseed oil futures post a strong trend on the ZCE today on tight supplies. Tensions are sourcing between China and Canada as well as the United States, and China’s consumption has recovered at a brisker pace than the forecast, which together underpin rapeseed oil market. However, China’s monthly soybean arrivals at ports are expected to surpass an average of 10 mln tonnes between June and August, and its weekly soybean crush has been at a very high level of over 2 mln tonnes. Moreover, buyers are cautious in purchases now on fears of a second wave of the COVID-19 outbreak, as new cases have been reported in Xinfadi agri-product wholesale market in Beijing. In addition, the price spread of rapeseed oil with soybean oil and palm oil is relatively huge at present. Therefore, rapeseed oil market will remain in thin trading due to a further price rise.

Cottonseed oil: Cottonseed oil prices keep steady today. The cost remains too high, and cottonseed oil supply gets tight among oil mills in Xinjiang, raising factories’ selling reluctance. Thus, cottonseed oil market is bolstered by these factors. However, it is predicted that soybean arrivals from June to August will reach an average of over 10 mln tonnes. And soybean crush rose by 7% to 2.05 tonnes last week and will likely record a new high of 2.10 mln tonnes for the coming two weeks. Additionally, dozens of new coronavirus cases emerged from Xinfadi wholesale market in Beijing since the weekend, raising concerns about a resurgence of the disease. These are all bearish for oils market and affecting buyers’ enthusiasm in purchasing. As U.S. soybeans enter a growing period and tensions between U.S. and China have yet to ease, oil plants prop up cottonseed oil price. Therefore, cottonseed oil price will not fall too much and likely fluctuate at a narrow range.

(USD $1=CNY ¥7.10)