Today (Jul 3), 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 4000-4060 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 mainly keep steady and further decline in several regions. Oil plants suffer from losses of crush margins due to pricey cottonseed. Besides, the delivery of cotton-by products gets slower, so some oil mills are not active in purchasing of cottonseed. 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, the overall cottonseed market may fluctuate to stay strong due to cottonseed shortage.

Oils: 

Summary: U.S. soybean futures eased on Thursday on dismal export data, but oil futures continue gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 20-60 CNY/tonne and palm oil up 50 CNY/tonne. The trading is predicted to remain good at low-level basis. Soybean oil traded 55,000 tonnes yesterday, most of which was forward contracts. A state-owned firm also made purchases in the market yesterday, and there were talks that a new round of purchases would get started. Malaysia’s palm oil futures rose for consecutive sessions, as its output might go below the forecast. And higher U.S. soybean prices have also raised the cost of imports. Actually, imported soybean crush is not lucrative if by DCE oil and meal prices. Besides, China and the U.S. are still in escalating tensions. All these together pull the oil market to move further higher, and short-term oil market is expected to maintain a strengthening pattern. But China’s oil mills maintain high operation rates now due to huge soybean imports and heat waste in summer, so that soybean oil stockpiles are also increasing. Hence, the oil market will probably fluctuate frequently on pressure from fundamentals.

Soybean oil: GB Grade I soybean oil is mainly priced at 5820-5970 CNY/tonne in domestic coastal areas, a rise of 20-60 CNY/tonne. (Tianjin traders 5880; Rizhao traders 5850; Zhangjiagang traders 6000-6010; and Guangzhou traders 5960-5970). 

Palm oil: RBD palm olein is mainly priced at 5320-5420 CNY/tonne in coastal areas, mostly up 50 CNY/tonne. (Tianjin traders 5370, up 50; Rizhao traders 5420, up 50; Zhangjiagang traders 5320, up 50; Guangzhou traders 5350-5360, up 50; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Thursday on dismal export data, but rapeseed oil futures move further higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 20-50 CNY at 7880-7930 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 China and the United States are also in tensions. These bolster rapeseed oil market. But China’s oil mills maintain high operation rates now due to huge soybean imports and heat waste in summer, so that soybean oil stockpiles are also increasing. Moreover, rapeseed and rapeseed oil have been unloaded at ports, so that rapeseed oil stocks rose by 8% to 186,000 tonnes. Buyers are not vigorous in the rapeseed oil market due to its much higher price than soybean oil and palm oil. The demand is also a curb on 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 today. And soybean oil trading volume extended to 55,000 tonnes, mainly for the basis of forward months. Besides, Malaysian palm oil continuously rebounded on Bursa Malaysia Derivatives (BMD) due to a likely lower-than-expected production. Moreover, 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 (DCE). Thus, these are supporting oils market. However, soybean arrivals are huge in quantity, and soybean will easily go bad in the hot summer weather, so the operation rate among crushing mills is extremely high, leading to a consecutive increase in soybean oil stocks. Therefore, the fundamental pressure persists, 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)