Today (Jun 19), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: PNW soybeans are quoted at 4000-4020 CNY/tonne and Brazilian soybeans at 3500 CNY/tonne at Shandong ports, which are also the delivery points. Currently, port stocks total 170,000 tonnes, and some 70,000 tonnes are expected to arrive later this month. Meanwhile, China also keeps purchasing U.S. soybeans. On the demand front, buyers are not vigorous and tend to wait, which also slows down port shipments. Overall, imported soybean market is predicted to be little changed in the short term.

Cottonseed: Cottonseed prices steadily decrease by 0.04 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 will pare gains but not drop too much, which is being a strong trend on the whole.

Oils: 

Summary: U.S. soybean futures rose on Thursday on good export data and concerns over weather conditions in the U.S. crop belt. Crude oil futures finished higher on Thursday, Beijing managed to bring recent Covid-19 outbreak under control, and a leading firm is purchasing soybean oil in the market, which together shore up the market confidence. Hence, oil futures post broad gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up by 80-130 CNY/tonne. The trading is predicted to be tepid for spot contracts due to huge rises, but may be decent for low-level forward contracts. The leading state-owned firm bought a total of 120,000 tonnes of soybean oil on Wednesday and Thursday, according to market sources. Add to that, 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 at a loss in China. Moreover, some mills have to halt soybean crush due to rising soybean meal inventories. Meanwhile, China has low palm oil stockpiles as its imports is small when domestic prices drop away from their purchasing prices from abroad, while recent palm oil exports and trading have been brisk in Southeast Asian producing countries. Therefore, the oil market is bracing for a new round of rises today. But China’s soybean imports will be huge in coming months and its weekly soybean crush also stays at a level of over 2 mln tonnes, so the upward space in the oil market still remains to be seen.

Soybean oil: GB Grade I soybean oil is mainly priced at 5870-5990 CNY/tonne in domestic coastal areas, mostly up 80-120 CNY/tonne. (Tianjin traders 5870-5890; Rizhao traders 5810; Zhangjiagang traders 5960; and Guangzhou traders 5990). 

Palm oil: RBD palm olein is mainly priced at 5450-5550 CNY/tonne in coastal areas, mostly up by 100-130 CNY/tonne. (Tianjin traders 5510, up 130; Rizhao traders 5550, up 130; Zhangjiagang traders 5450, up 100; Guangzhou traders 5520, up 130; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Thursday on good export data and concerns over weather conditions in the crop belt. And rapeseed oil futures further rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 50 CNY/tonne to 7880-7920 CNY/tonne in thin trading. The cost of importing Brazilian soybeans go up on the back of rising premiums due to increasingly tightening remaining stocks. China’s palm oil stocks are also reducing as imports are not lucrative at the moment. Besides, tensions are sourcing between China and Canada as well as the United States, and rapeseed oil stocks are also low, which also help boost the prices. But 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. And rapeseed oil is less competitive in prices compared to soybean oil and palm oil. Overall, short-term rapeseed oil market may still stay at the high level, but in thin trading.

Cottonseed oil: Cottonseed oil prices mainly keep steady and partly follow futures to rise by 50 CNY/tonne. Cottonseed is pricey and in tight supply in Xinjiang, so oil factories are in no hurry to sell cottonseed oil. Crude oil goes up, and the COVID-19 outbreak in Beijing is under control. Also, a major enterprise keeps purchasing soybean oil. Accordingly, market confidence is shored up. Based on this, oils on Dalian Commodity rise broadly today, with an increase of 80-130 CNY/tonne in spot soybean oil and palm oil. 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, so cottonseed oil delivery gets slower. It is predicted that short-term cottonseed oil may follow bulk oils to stay strong. FYI, buyers can make proper replenishment on dips but not chase up price too excessively.

(USD $1=CNY ¥7.09)