Today (Jun 30), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: At Shandong ports today, the reference price for PNW soybeans goes up 50 CNY/tonne at 4050 CNY, and Brazilian soybeans down by 50 CNY at 3550 CNY/tonne. PNW soybeans prices are strengthening at domestic ports, as the supply is highly concentrated and domestic soybean prices keep rising. However, Brazilian soybean stocks have been at a high level at ports, and soybean cargoes from Argentina Uruguay are arriving at Shandong ports, so port stocks will continue an uptrend. 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, 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.

Oils: 

Summary: U.S. soybean futures closed with gains on Monday and good export data and short coverings, and crude oil prices were also higher. Oil futures head up on China’s Dalian Commodity Exchange today, and post sharp rises compared to previous close. In the spot markets, soybean oil increases by 30-80 CNY/tonne and palm oil up 60-80 CNY/tonne. The trading is predicted to be good on low-level basis, but tepid for spot contracts. Imported soybean crush in China is not lucrative any more if by DCE oil and meal prices. In addition, relations between China and the United States remain uncertain. After the Nationwide Safety Legislation for Hong Kong passed in Beijing today, the U.S. announced to cancel Hong Kong’s special status. Hence, domestic oil market is bolstered to rebound today. But China’s oil mills maintain high operation rates due to huge soybean imports and heat waste in summer, and soybean oil stocks thus increase by 8% weekly to 1.12 mln tonnes. And the consumption of palm oil is slow due to its small price gap with soybean oil, and port palm oil stocks will also extend an upward trend. The demand for oils has been declining for two weeks in China, and palm oil exports also seem to slow down in Malaysia. Overall, the oil market is predicted to follow futures to swing frequently in the short run.

Soybean oil: GB Grade I soybean oil is mainly priced at 5740-5880 CNY/tonne in domestic coastal areas, a rise of 30-70 CNY/tonne. (Tianjin traders 5740; Rizhao traders 5740; Zhangjiagang traders 5880; and Guangzhou traders 5840). 

Palm oil: RBD palm olein is mainly priced at 5300-5380 CNY/tonne in coastal areas, mostly up 60-80 CNY/tonne. (Tianjin traders 5330-5350, up 70; Rizhao traders 5380, up 60; Zhangjiagang traders 5300, up 80; Guangzhou traders 5350-5370, up 70; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures edged up on Monday on good export data, but rapeseed oil futures decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices fluctuate by 20-30 CNY at 7800-7850 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. However, relations between China and the United States remain uncertain. After the Nationwide Safety Legislation for Hong Kong passed in Beijing today, the U.S. announced to cancel Hong Kong’s special status. And China and Canada are also in souring relations. Besides, rapeseed oil stocks also keep tightening due to small rapeseed supply and low crush, which makes rapeseed oil market stronger than other oils. Overall, rapeseed oil market may keep range-bound at the 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, which underpins cottonseed oil market. However, soybean arrival at ports is huge in quantity and soybean is easily damaged under the hot summer weather. In this case, crushing mills improve the operation rate, and soyoil stocks continue increasing by 8% to 1.12 mln tonnes compared with the previous week. Besides, 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, it sees frequent volatility in bulk oil market, which is bearish for cottonseed oil market. And It is predicted that cottonseed oil market may move sideways in a short term.

(USD $1=CNY ¥7.08)