Today (Jul 7), 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 4000-4100 CNY, and Brazilian soybeans at 3460-3570 CNY. Soybean stocks have been at a high level at Shandong ports, and some 200,000 tonnes from Uruguay will also be reaching ports gradually; hence, soybean stocks at ports will further increase. But there is only rigid demand in the market and 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 decline by 0.03 CNY/kg today. Oil plants suffer from losses of crush margins due to pricey cottonseed. It is lack of vehicles as Xinjiang melons come into the market, so the freight goes up. In this case, factories purchase not much cottonseed. But cottonseed is in short supply, and it will be three months before new cottonseed enters market, so some traders prop up price. Therefore, the market is likely to edge down tentatively due to cottonseed shortage, but will still stay strong on the whole.

Oils: 

Summary: U.S. soybean futures rose on Monday, as hot and dry weather across the crop belt could threaten soybean yields. On China’s Dalian Commodity Exchange today, oil futures rush higher in early trading and then gradually pare gains to quickly decline in the afternoon. In the spot markets, soybean oil goes down 10-50 CNY/tonne and palm oil down 50 CNY/tonne, both in tepid trading. DCE oil futures went strong yesterday on the back of a huge rise in the stock market, but decline today on profit-taking as the market focus shifts to the fundamentals. Malaysia’s crude palm oil output is seen up 12.7% month-on-month in June, data from the MPOA showed. Moreover, China’s soybean oil stocks have risen by 6% weekly to 1.19 mln tonnes, and weekly soybean crush will continue stay at a high level of over 2 mln tonnes in coming weeks due to huge soybean imports. Meanwhile, the demand for oils is slack at present. Therefore, it is difficult for the oil market to maintain a steep uptrend. But U.S. soybean futures are also climbing higher on crop weather problems, which also enhances the cost of imports. And uncertainty still remains between China and the U.S..Overall, the oil market is predicted to keep strengthening and may fluctuate frequently on bearish fundamentals. Buyers can wait to buy the dips for appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5880-6030 CNY/tonne in domestic coastal areas, a decline of 10-50 CNY/tonne. (Tianjin traders 5880; Rizhao traders 5900; Zhangjiagang traders 6030; and Guangzhou traders 5970-5980). 

Palm oil: RBD palm olein is mainly priced at 5330-5380 CNY/tonne in coastal areas, mostly down 50 CNY/tonne. (Tianjin traders 5380, down 50; Rizhao traders not available; Zhangjiagang traders 5330, down 50; Guangzhou traders 5350, down 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Monday, and rapeseed oil futures also extend gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 10-20 CNY at 7950-8040 CNY/tonne in tepid trading. China’s imports of rapeseed will still be curbed amid tensions with Canada, and rapeseed oil stocks now are mainly for previous contracts. Besides, uncertainty still lingers between China and the United States, and investors have shifted their focus on U.S. crop weather now. Hence, rapeseed oil market is bolstered. However, China’s commercial stocks of soybean oil keep rising due to huge soybean imports and high soybean crush. And Malaysia’s palm oil output in June is expected to go up 8% to 1.78 mln tonnes. These may curb on the rise in rapeseed oil prices. Rapeseed oil futures snap the uptrend to down in afternoon trading, so participants are suggested to prevent risks of short-term fluctuations.

Cottonseed oil: Cottonseed oil prices stay stable with a rise of 50 CNY/tonne in some regions today. U.S. soybean futures rose on Monday as the high temperature and dryness across crop area could threaten soybean yields potential. Oils on Dalian Commodity Exchange also rushed higher in early trade. Likewise, cottonseed price is still high. Accordingly, oils market is bolstered by these factors. However, soybean arrival is huge in quantity and soybean crush is extremely high. In this case, soybean oil stocks have risen by 6% to 1.19 mln tonnes compared with the previous week. In addition, Malaysian palm oil production is expected to increase, and oils market moves with fluctuations in afternoon trade. It is predicted that short-term cottonseed oil market may follow bulk oils to fluctuate to stay strong.

(USD $1=CNY ¥7.03)