Today (Jun 18), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Prices are not offered and shipments also come to a halt 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, at a pace of at least 2 cargoes every day. Hence, 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 with several decrease of 0.05 CNY/kg today. Crushing plants reduce the operation rate on account of profit losses. Besides, the market of cotton-by products is dragged down by concerns over a second wave of coronavirus outbreak, so some traders have cut the price. But the supply of cottonseed is decreasing and tightening, raising traders’ selling reluctance. Moreover, the vehicles from Xinjiang to inland are lacked as Xinjiang melons and fruits come into the market, so the freight will not decline, which will bolster the delivered price of Xinjiang cottonseed. Therefore, cottonseed price stops rising and starts fluctuating but will not drop too much, which is being a strong trend on the whole.

Oils: 

Summary: U.S. soybean futures rose on Wednesday, as China had purchased some $10 billion of U.S. products thus far. On China’s Dalian Commodity Exchange (DCE ) today, soybean oil futures rush higher in early trade and then gradually narrow down gains, while palm oil futures swing to slightly lower. In the spot markets, soybean oil mostly goes up 10-50 CNY/tonne and palm oil fluctuates by 10-40 CNY/tonne, and the trading is predicted to be tepid. With huge soybean arrivals expected in the coming months, China’s oil mills have been maintaining weekly soybean crush at an extremely high level of 2 mln tonnes, for which DCE oil futures are in the correction territory for days. However, Brazilian soybean prices have risen due to increasing tightening supplies. Actually, if by DCE oil and meal prices, the crushing of Brazilian and PNW soybean is in the red in China. Moreover, soome mills have to halt soybean crush due to rising soybean meal inventories. Meanwhile, China has low palm oil stockpiles, as buyers make only small imports when domestic prices drop away from their purchasing prices from abroad. Overall, the oil market is predicted to fluctuate to maintain a strengthening trend. Buyers are suggested not to chase higher prices as DCE oil futures are in the correction territory.

Soybean oil: GB Grade I soybean oil is mainly priced at 5740-5860 CNY/tonne in domestic coastal areas, mostly up 10-50 CNY/tonne. (Tianjin traders 5740-5760; Rizhao traders 5750; Zhangjiagang traders 5840-5860; and Guangzhou traders 5860). 

Palm oil: RBD palm olein is mainly priced at 5400-5430 CNY/tonne in coastal areas, fluctuating by 10-40 CNY/tonne. (Tianjin traders 5390-5410, down 40; Rizhao traders 5430, down 30; Zhangjiagang traders 5360-5370, down 30; Guangzhou traders 5400-5410, down 20; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed with gains on Wednesday as China was making purchases as agreed under the phase one trade deal. And rapeseed oil futures rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 60 CNY/tonne to 7830-7870 CNY/tonne in thin trading. China has low palm oil stockpiles, as importers make few fresh purchases when domestic prices drop away from their purchasing prices from abroad. Palm oil futures post a strong trend on the DCE. China and Canada are trapped in tensions, and domestic rapeseed oil stocks are also at low levels. Hence, rapeseed oil prices get boosted. However, the resurgence of the COVID-19 in Beijing will probably hit the catering industry again. Besides, monthly soybean arrivals at China’s ports are expected to exceed 10 mln tonnes in June, July and August, and domestic oil mills also maintain soybean crush at an extremely high level. Overall, rapeseed oil prices will stay at the high level on tight supplies, but will be less competitive compared to other oils, so the trading will remain thin.

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. So far, China has purchased approximately 10 billion dollars of U.S. commodities. US soybean futures rose on Wednesday. And soybean oil on Dalian Commodity goes up today, with an increase of 10-50 CNY/tonne in the spot market. Thus, cottonseed oil market is underpinned by these factors. But with soybean arriving at ports in huge quantity over the coming months, weekly soybean crush will stay at an extremely high level of more than 2 mln tonnes, which is bearish for oils market. And it also has 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)