Today (Jun 23), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: PNW soybeans are quoted higher by 20 CNY at 4070-4080 CNY/tonne and Brazilian soybeans lower by 50 CNY at 3450-3500 CNY/tonne at Shandong ports, which are also the delivery points. Domestic soybean prices are at a high level, and PNW soybean supply is highly concentrated at ports, both of which bolster its prices to increase. But Brazilian soybeans are in huge supply and of very different qualities. In addition, some soybean cargoes from Argentina are unloading at domestic ports, and some vessels from Uruguay are also expected to arrive soon. Hence, port stocks will get an increase. On the demand front, buyers are not vigorous, 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 steadily decline by 0.02 CNY/tonne 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 stay strong on the whole.

Oils: 

Summary: U.S. soybean futures fell on Monday on favorable weather across the crop belt and U.S. soybean crops were 96% planted, above 83% last year and also above 93% of the five-year average. And oil futures swing to decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially fluctuates by 10-20 CNY/tonne and palm oil down by 10-30 CNY/tonne. Global palm oil consumption will reduce sharply by 2.2 million tonnes year on year, according to an industry analyst. This has cracked down on the market sentiment. Meanwhile, with huge soybean arrivals and on concerns over the storage in the scorching summer, Chinese oil mills are seeking to work at full capacity. China’s weekly soybean crush rose by 4% to a new high of 2.14 mln tonnes last week, and is expected to stay at 2.15 mln tonnes in the coming two weeks. And soybean oil stocks thus increased by 8.5% weekly to 1.04 mln tonnes. However, Malaysia’s palm oil exports are strong in June, and China’s palm oil stockpiles are at a low level in spite of a weekly 12% increase to 396,000 tonnes this week. Meanwhile, imported soybean crush is at a loss in China if by DCE prices, so traders are propping up prices. Overall, short-term oil market is predicted to follow futures to fluctuate and adjust, but the decline will be limited and the overall trend will be strengthening. DCE oil futures are swinging, so buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5860-5980 CNY/tonne in domestic coastal areas, partially fluctuating by 10-20 CNY/tonne. (Tianjin traders 5860; Rizhao traders 5800; Zhangjiagang traders 5980; and Guangzhou traders 5980). 

Palm oil: RBD palm olein is mainly priced at 5460-5540 CNY/tonne in coastal areas, mostly down 10-30 CNY/tonne. (Tianjin traders 5490-5500, down 10; Rizhao traders 5540, down 10; Zhangjiagang traders 5460, down 10; Guangzhou traders 5500-5510, down 30; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Monday on disappointing export data and on favorable crop weather in the U.S. Midwest. But rapeseed oil futures are slightly higher on China’s Zhengzhou Commodity Exchange today on tight supplies. Spot rapeseed oil prices stay at 7860-7910 CNY/tonne in tepid trading. With huge soybean arrivals expected between June and August, Chinese 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 rapeseed imports are not smooth, and domestic importers also do not make bulk purchases of palm oil, so that its overall stocks remain at a historical low level. Traditionally, the second half of a year is the peak consumption season of oils, which now helps support the market. Overall, rapeseed oil prices will probably stay at a high level in the short run.

Cottonseed oil: Cottonseed oil prices are stable today. 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. Besides, U.S. soybeans have been planted 96%, higher than 83% in the corresponding period last year and a five-year average of 93%. Also, the weather in crop area is favorable for crop condition. U.S. soybean futures went down on Monday. Today, oils on Dalian Commodity Exchange fluctuated to fall back. In this case, all these factors are bearish for cottonseed oil market. It is predicted that cottonseed oil market may move sideways in a short term, but will likely follow bulk oils to fluctuate to stay strong on the whole.

(USD $1=CNY ¥7.07)