Today (Jun 22), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: PNW soybeans are quoted higher by 50 CNY at 4050-4060 CNY/tonne and Brazilian soybeans steadily at 3500 CNY/tonne at Shandong ports, which are also the delivery points. PNW soybean prices keep strengthening at ports as its supply is highly concentrated now. However, Brazilian soybean stocks are high at ports, and some 70,000 tonnes are expected to arrive later this month, which can be a substitute for PNW soybeans. On the demand front, buyers are not vigorous and there is only rigid demand in the market, which also slows down port shipments. Overall, imported soybean market is predicted to trade at a narrow range in the short term.

Cottonseed: Cottonseed prices stay stable today. Oil plants suffer from losses of crush margins due to pricey cottonseed, so they are not active in the purchase of cottonseed. Besides, the market of cotton-by products is dragged down by concerns over a spread of coronavirus in Beijing, so some traders have cut the price. But the supply of cottonseed is decreasing and tightening, raising traders’ selling reluctance. Moreover, the freight from Xinjiang to inland will not decline result from a short of vehicles, which will also bolster the delivered price of Xinjiang cottonseed. Therefore, cottonseed price is predicted to pare gains but be a strong trend on the whole.

Oils: 

Summary: U.S. soybean futures rose last Friday, as China would ramp up U.S. farm products purchases after the Hawaii talks between high-level officials from both sides, according to a report by Bloomberg. Oil futures are higher but below the previous close. In the spot markets, soybean oil and palm oil mostly stay stable and partially fluctuate by 10-30 CNY/tonne. The trading is predicted to be tepid for spot contracts, but may be decent for low-level forward contracts. With huge soybean arrivals and on concerns over the storage in the scorching summer, oil mills are seeking to maintain high operation rates. Weekly soybean crush rose by 4% last week to a new high of 2.14 mln tonnes, and soybean oil stocks thus increased by 8.5% weekly to 1.04 mln tonnes. An increase in oil supply will likely disturb the market sentiment, which will be a resistance for the oil market. However, Malaysia’s palm oil exports are strong in June and export prices are keeping firm under low sales pressure, so that margins of importing palm oil in China is not improving. Palm oil stocks increased by 12% to 396,000 tonnes this week in China, which is still at a low level. Meanwhile, the cost of importing Brazilian soybeans have significantly risen due to firm premiums under tight supplies. Actually, if by DCE oil and meal prices, the crushing of Brazilian and PNW soybean is at a loss in China. Overall, the oil market is predicted to follow futures to fluctuate to adjust in the short run and will probably not decline sharply. Buyers can wait at the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5860-5980 CNY/tonne in domestic coastal areas, fluctuating by 10-20 CNY/tonne. (Tianjin traders 5860-5880; Rizhao traders 5830; Zhangjiagang traders 5970; and Guangzhou traders 5980). 

Palm oil: RBD palm olein is mainly priced at 5470-5550 CNY/tonne in coastal areas, partially fluctuating by 10-30 CNY/tonne. (Tianjin traders 5520-5530, down 10; Rizhao traders 5550, down 20; Zhangjiagang traders 5470, down 20; Guangzhou traders 5530, flat; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose last Friday, and rapeseed oil futures are higher but stay below the previous close on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 10-20 CNY/tonne to 7860-7910 CNY/tonne in thin trading. With huge soybean arrivals expected between June and August, oil mills again picked up soybean crush to a new high of 2.14 mln tonnes last week, and soybean oil stocks thus sharply increased. But palm oil imports are small in China now as the cost of imports is higher than domestic selling prices, so palm oil stocks are staying at a low level. Palm oil futures on the DCE are strong as investors increase their positions, which also helps bolster other oil futures. In addition, Besides, tensions are souring between China and Canada as well as the United States, and rapeseed oil stocks are also low, which also help boost the prices. Overall, short-term rapeseed oil market may still stay at the high level, but it is necessary to prevent short-term fluctuations.

Cottonseed oil: Cottonseed oil prices mainly keep steady and fluctuate by 30-250 CNY/tonne in some regions. Cottonseed is pricey and in tight supply in Xinjiang, so oil factories are in no hurry to sell cottonseed oil. These factors are offering support to cottonseed oil market. But soybean arrivals at ports are huge in quantity, and soybeans are easily damaged under the hot weather, so crushing plants are operating as usual as possible. Last week, soybean crush set to a record high of 2.14 mln tonnes with a rise of 4% from a week earlier, and soybean oil stocks increased by 8.5% to 1.04 mln tonnes compared with the previous week. In this case, all these factors are bearish for cottonseed oil market. It is predicted that short-term cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥7.09)