Today (Jun 29), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: PNW soybeans are quoted at 4,000 CNY/tonne at Shandong ports today. Soybean cargoes from Argentina Uruguay are arriving at Shandong ports, and Brazilian soybean stocks at ports are also at a high level; hence, port stocks will keep increasing. On the demand front, there is only rigid demand in the market as downstream customers are not vigorous at present, which slows down port shipments. In a hybrid of the bull and the bear, imported soybean market is predicted to trade at a narrow range in the short term.

Cottonseed: Cottonseed prices are stable with a decline in several regions 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 delivery of cotton-by products gets slower, and bulk oils and meals go down, so some cottonseed traders have reduced the price by a little. But the supply of cottonseed is decreasing and tightening, raising traders’ selling reluctance. Therefore, cottonseed price is predicted to fluctuate slightly in a short term but stay strong on the whole.

Oils: 

Summary: U.S. soybean futures closed lower in the last several sessions, and oil futures crash after the trading recovers on China’s Dalian Commodity Exchange today. As the number of coronavirus cases in the United State surged again and with a decline in global crude oil prices, senior analysts were bearish about the demand for oils and Malaysia’s palm oil fell for a third straight session last Friday. China’s soybean oil stocks keep an upward trend as oil mills maintain operation rates at a very high level due to huge soybean imports and heat waste in summer, and soybean oil stocks thus increase by 8% weekly to 1.12 mln tonnes. The consumption of palm oil is slow due to its small price gap with soybean oil, and palm oil stocks at domestic ports will also extend an upward trend. Domestic demand for oils has been declining for two weeks, so that oil prices are falling due to bearish fundamentals. However, imported soybean crush is not lucrative in China now if by DEC meal and oil prices. Besides, China warned that the U.S. meddling in Hong Kong and Taiwan affairs could jeopardize the phase one trade deal, according to a report by the Wall Street Journal. And U.S. soybean crops are in the stage of growth when there could be weather speculations easily in the market. The above speculation could be a buoyant of the oil market. But short-term oil market will probably continue to follow futures to adjust, and buyers can stay at the sidelines temporarily.

Soybean oil: GB Grade I soybean oil is mainly priced at 5690-5830 CNY/tonne in domestic coastal areas, a decline of 80-160 CNY/tonne. (Tianjin traders 5690; Rizhao traders 5720; Zhangjiagang traders 5830; and Guangzhou traders 5780-5790). 

Palm oil: RBD palm olein is mainly priced at 5220-5280 CNY/tonne in coastal areas, mostly down 170-200 CNY/tonne. (Tianjin traders 5260-5280, down 180; Rizhao traders not available; Zhangjiagang traders 5220-5230, down 180; Guangzhou traders 5280, down 180; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures fell last Friday, and rapeseed oil futures swing to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 70-80 CNY at 7780-7850 CNY/tonne in tepid trading. China’s soybean oil stocks keep an upward trend as oil mills maintain operation rates at a very high level due to huge soybean imports and heat waste in summer. And the demand for rapeseed oil is limited due to its much higher price than soybean oil and palm oil. Hence, rapeseed oil prices decline to adjust today. However, domestic palm oil stocks are low and rapeseed oil stocks also keep tightening due to small rapeseed supply and low crush, which will continue to underpin the market and limit the price declines. ZCE futures are in correction, so buyers can wait for the moment.

Cottonseed oil: Cottonseed oil prices mainly keep steady and partly decrease by 20-50 CNY/tonne. The COVID-19 cases surged in U.S. again. And well-known analysts are bearish on the demand for oils as global crude oil stopped rising and set to fall. Moreover, soybean crush remains extremely high, and soyoil stocks in coastal regions continue increasing by 8% to 1.12 mln tonnes compared with the previous week. But it is unfavorable for the consumption of palm oil due to narrowed price spread between soybean oil and palm oil, so domestic palm oil stocks at ports will also keep going up. With a declining demand for oils over the recent two weeks, the fundamentals become bearish and bulk oil market notably falls back. In addition, cottonseed is pricey and in tight supply in Xinjiang, so oil factories are in no hurry to sell cottonseed oil, which leads cottonseed oil to be resilient. It is predicted that cottonseed oil market may move sideways in a short term, but will likely pare no more gains than bulk oils.

(USD $1=CNY ¥7.08)