Today (Jul 2), 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 stays at 4000 CNY, Brazilian soybeans at 3550 CNY, and Argentine soybeans at 3,580 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 steadily edge lower today. Oil plants suffer from losses of crush margins due to pricey cottonseed. Besides, the delivery of cotton-by products gets slower, so some cottonseed traders have reduced price a little. But cottonseed is in short supply, and it will be two or three months before new cottonseed enters market, so some traders are reluctant to sell them and prop up price. Therefore, short-term cottonseed price may stay strong as a whole due to cottonseed shortage.

Oils: 

Summary: U.S. soybean futures continued sharp rises with the most-active contract hitting nearly 900 cents on Wednesday on the bullish report and as hot, dry weather forecast in coming weeks could hurt soybean crops. On China’s Dalian Commodity Exchange today, soybean oil futures post huge gains, but palm oil has smaller rises, as the SPPOMA forecast that June production would see an increase of 22.7%, which triggers concerns over higher carryover stockpiles. In the spot markets, soybean oil goes up 50-90 CNY/tonne and palm oil partially down by 10 CNY/tonne. Soybean oil attracts some purchases at low levels, but the overall trading is in small volume in the oil market. The cost of importing is growing following higher U.S. soybean prices, and imported soybean crush in China is not lucrative 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 in Hong Kong. Some also talk that it is Oct-Jan deliveries. These together shore up the market confidence. The overall oil market is predicted to fluctuate with a strengthening trend. But China’s oil mills maintain high operation rates now due to huge soybean imports and heat waste in summer, and soybean oil stocks thus increase by 8% weekly to 1.12 mln tonnes, which may limit the price rises. And the small price difference between soybean oil and palm oil is also denting the consumption of palm oil. Soybean oil market has been stronger than palm oil, which will to some extent enlarge the price spread.

Soybean oil: GB Grade I soybean oil is mainly priced at 5820-5970 CNY/tonne in domestic coastal areas, a rise of 50-90 CNY/tonne. (Tianjin traders 5820; Rizhao traders 5820; Zhangjiagang traders 5970; and Guangzhou traders 5910-5920).

Palm oil: RBD palm olein is mainly priced at 5260-5330 CNY/tonne in coastal areas, a partial decline of 10 CNY/tonne. (Tianjin traders 5280, flat; Rizhao traders 5330, flat; Zhangjiagang traders 5230, flat; Guangzhou traders 5260-5280, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures saw gains on Wednesday, and rapeseed oil futures also rise on China’s Dalian Commodity Exchange today. Spot rapeseed oil prices go up 10-30 CNY at 7830-7910 CNY/tonne in tepid trading. China’s rapeseed imports are limited amid tensions with Canada, so that rapeseed crush remains at a low level and spot rapeseed oil is also in tight supplies. Besides, China and the United States are also in tensions. These bullish factors still support rapeseed oil to extend a strengthening trend. But domestic oil mills maintain operation rates at a very high level due to huge soybean imports and heat waste in summer, so soybean oil stocks will continue to rise. And the demand for rapeseed oil is limited due to its much higher price than soybean oil and palm oil. These 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 stay stable with some rises today. U.S. soybean futures climb up consecutively, pulling up the import cost. And imported soybean crush is unprofitable according to the oils and meals price on Dalian Commodity Exchange. On the other hand, China has officially implemented the national security law on Hong Kong, escalating tensions with United States. Likewise, cottonseed is in tight supply in Xinjiang, so oil factories are in no hurry to sell cottonseed oil, which underpins cottonseed oil market. However, soybean will easily go bad in the hot summer weather, so the operation rate among crushing mills is extremely high. Soybean oil stocks further increase to 1.12 mln tonnes, up by 8% than the previous week, which may limit the price rises of oils in later period. It is predicted that short-term cottonseed oil market may fluctuate to stay strong in a short term.

(USD $1=CNY ¥7.06)