Today (Jun 17), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Prices are not available at Shandong ports today amid an inspection on soybean flow by commodity authorities. Soybean stockpiles are at a high level at domestic ports, but downstream buyers hold a wait-and-see attitude, so soybean shipments are at a slow pace. In addition, Argentine and Uruguayan soybean vessels will be arriving at domestic ports later this month, and China continues purchasing U.S. soybeans, so imported soybean stocks will be pushed further higher later, which will also be a constraint to the market. Market traders said that port trading will turn normalized, but there is no detail at this point. Overall, port soybean market is predicted to still trade at a narrow range after the inspection.

Cottonseed: Cottonseed prices stay stable and increase by 0.02 CNY/kg today. The supply of cottonseed is decreasing and tightening, so traders are reluctant to cut price. But crushing plants reduce the operation rate on account of profit losses. And Beijing has raised its COVID-19 emergency response to level II, which drags down cotton-by products market. Therefore, cottonseed price is depressed by these factors, and will likely stop rising amid current market stalemate. But short-term price will still be in a strong trend due to cottonseed shortages.

Oils: 

Summary: U.S. soybean futures edged lower Tuesday on good crop condition. Several employees from a restaurant in Fengtai District, Beijing, tested positive and were confirmed for the coronavirus cases. Beijing on Tuesday raised its COVID-19 emergency response to level II and also ordered elementary and secondary schools to close and halted cross-provincial group tours. Soybean oil futures swing fractionally lower and palm oil narrows down gains on China’s Dalian Commodity Exchange (DCE) today, as traders are worried that the escalation in the pandemic control could again blow the catering businesses. Palm oil is still the best performer now on a robust export prospect for Malaysian palm oil. Increasingly tightening supplies for Brazilian soybeans make premiums keep firm, and its crushings in China are no more lucrative if by meal and oil prices on the DCE. And several domestic oil mills are bothered with swelling soybean meal inventories. Meanwhile, domestic palm oil stockpiles are also tight as imports are small due to negative margins. The above factors together underpin the oil market to keep range-bound and maintain a strengthening trend. But oil mills still maintain high operation rates now, and the demand for soybean oil is affected by concerns over the pandemic. Hence, the oil market face high resistance in moving higher and will probably fluctuate frequently. Buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5700-5850 CNY/tonne in domestic coastal areas, mostly down 20-50 CNY/tonne. (Tianjin traders 5700-5720; Rizhao traders 5710; Zhangjiagang traders 5850; and Guangzhou traders 5810-5820). 

Palm oil: RBD palm olein is mainly priced at 5380-5410 CNY/tonne in coastal areas, partially fluctuating by 10-50 CNY/tonne. (Tianjin traders 5380-5390, down 10; Rizhao traders 5410, flat; Zhangjiagang traders 5340-5350, flat; Guangzhou traders 5380-5390, down 10; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures edged lower Tuesday on good crop condition. Several employees from a restaurant in Fengtai District, Beijing, tested positive and were confirmed for the coronavirus case, and Beijing on Tuesday raised its COVID-19 emergency response to level II. Rapeseed oil futures trade at a narrow range on China’s Zhengzhou Commodity Exchange today, as participants are concerned that the escalation in the pandemic control could again hit catering the industry. Spot rapeseed oil prices go up 10-20 CNY/tonne to 7770-7810 CNY/tonne in thin trading. Tensions are sourcing between China and Canada as well as the United States. Domestic rapeseed oil stockpiles stay relatively low, and the cost importing Brazilian soybeans have been moving higher due to its tight supplies. But domestic oil mills now maintain soybean crush at a very high level due to massive soybean imports. Meanwhile, the thin trading in rapeseed oil market is also a curb. Overall, short-term rapeseed oil market may fluctuate at the high level.

Cottonseed oil: Cottonseed oil prices keep steady today. Cottonseed is pricey and in tight supply in Xinjiang, so oil factories are in no hurry to sell cottonseed oil. 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. These are all bearish for oils market. On the other hand, Beijing raised its COVID-19 emergency response level to II from III. Primary schools and high schools across Beijing were shut, and trans-provincial group tour was also halted. A number of chefs, cooks and purchasing clerks in restaurants in Fengtai District were confirmed with the coronavirus. With an upgrade of epidemic prevention and control, the concerns about a fresh impact on catering services were triggered. Consequently, soybean oil fluctuates to slightly lower and palm oil pares gains on Dalian Commodity Exchange, and spot soybean oil mostly down by 20-50 CNY/tonne. These factors have affected buyers’ enthusiasm in purchasing. Therefore, cottonseed oil is in light trading and may fluctuate at a narrow range in the near term.

(USD $1=CNY ¥7.09)