Today (Jul 1), 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 down 50 CNY/tonne at 4000 CNY, and Brazilian soybeans at 3550 CNY/tonne. Soybean vessels from Argentina and Uruguay have been arriving at Shandong ports from time to time for days, thus increasing port stocks there. While port stocks have been at a high level at present, there is only rigid demand in the market. Downstream customers are not vigorous at present, which slows down port shipments. In the short run, imported soybean market is predicted to fluctuate with a weakening trend.

Cottonseed: Cottonseed prices are stable today. Cottonseed is in short supply, and it still takes time for new cottonseed to enter market, so some traders are reluctant to sell them and prop up price. But oil plants suffer from losses of crush margins due to pricey cottonseed. Besides, the delivery of cotton-by products gets slower, so crushing mills are lack of enthusiasm in the purchase of cottonseed. Therefore, short-term cottonseed price remains flat but stay strong as a whole.

Oils: 

Summary: U.S. soybean futures braced for sharp rises on Tuesday on the below-forecast soybean planting acreage in the USDA report. On China’s Dalian Commodity Exchange today, soybean oil futures swing to slightly higher after getting rid of bad performance in early trading, but palm oil futures decline. In the spot markets, soybean oil goes up 20-30 CNY/tonne partially and palm oil drops by 40-80 CNY/tonne, both attracting some purchases at low levels. India is said to hike its import tariff on palm oil by 20-25 USD/tonne, dragging down Malaysia’s palm oil futures. The small price difference between soybean oil and palm oil is not helping the consumption of palm oil, so that palm oil stockpiles are also rising. And 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. The demand for oils has been declining for two weeks in China, so concerns over the glut are also weighing down the market. But imported soybean crush in China is not lucrative any more if by DCE oil and meal prices. Moreover, China and the U.S. are still in escalating tensions, as China has officially implemented the National Security Law for Hong Kong. In addition, the market is also focusing on weather conditions in the U.S. crop belt, as soybean crops will soon enter into key growing period. Overall, short-term oil market is predicted to follow futures to swing frequently, rather than fall sharply.

Soybean oil: GB Grade I soybean oil is mainly priced at 5740-5880 CNY/tonne in domestic coastal areas, a partial rise of 20-30 CNY/tonne. (Tianjin traders 5740-5750; Rizhao traders 5760; Zhangjiagang traders 5880; and Guangzhou traders 5830-5840). 

Palm oil: RBD palm olein is mainly priced at 5250-5330 CNY/tonne in coastal areas, down 40-80 CNY/tonne. (Tianjin traders 5280-5300; Rizhao traders 5330; Zhangjiagang traders 5250; Guangzhou traders 5270-5290; and Xiamen not available).

Rapeseed oil: U.S. soybean futures sharply rose on Tuesday, as the USDA put U.S. plantings and quarterly stockpiles below the market forecast. And rapeseed oil futures also move higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 20-50 CNY at 7820-7900 CNY/tonne in tepid trading. Tensions have been escalating between China and the United States, and China and Canada are also in souring relations. As rapeseed crush remains low in China, its rapeseed oil supplies are also tightening and most mills can only make delivery of contracts. Hence, domestic rapeseed oil is shored up. But with huge soybean imports in June-August, domestic oil mills will also maintain very high operation rates in coming two weeks, so soybean oil stocks will continue to increase. Besides, the demand for oils has been declining because of the COVID-19 outbreaks across the globe. The bearish fundamentals may curb the rise in rapeseed oil prices. Overall, short-term rapeseed oil market is predicted to follow futures to fluctuate at the high level.

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. Rumor has it that India will hike the palm oil tariff by 20-25 USD/tonne, dragging down palm oil on Bursa Malaysia Derivatives. But it is unfavorable for the consumption of palm oil due to narrowed price spread between soybean oil and palm oil. Besides, soybean will easily go bad in the hot summer weather, so the operation rate among crushing mills is extremely high. People are concerned about that supply will exceed demand, putting pressure on the market and depressing cottonseed oil price. It is predicted that short-term cottonseed oil market may stay stable with fluctuations in a short term.

(USD $1=CNY ¥7.07)