Today (Jul 8), 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 remain flat 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, short-term cottonseed market is likely to fluctuate to stay strong due to cottonseed shortage.

Oils: 

Summary: U.S. soybean futures fell on Tuesday due to favorable rains in the U.S. crop regions and as 71% of the nation’s soybean acreage was rated in good to excellent condition, but U.S. soyoil futures rose on net buying. And oil futures open low to swing higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially fluctuates by 10-60 CNY/tonne and palm oil up by 50-70 CNY/tonne, attracting some low-level purchases. Malaysia’s crude palm oil output is seen up 12.7% month-on-month in June, data from the MPOA showed. This will bring the total output to nearly 1.86 mln tonnes, thus hugely offsetting the bullish influence from robust exports. Add to that, monthly palm oil production could hit 2 mln tonnes in Malaysia due to seasonal growth. And in China, soybean oil stocks have risen by 6% weekly to 1.19 mln tonnes on huge soybean imports and extraordinarily high soybean crush. On the demand side, there is no bulk purchases, so the oil market fails to keep climbing higher and thus fluctuates frequently. However, U.S. soybean futures are strong on crop problems, leading to a rise in the cost of imports. And uncertainty still remains between China and the U.S.. Overall, the oil market is predicted to keep strengthening.

Soybean oil: GB Grade I soybean oil is mainly priced at 5880-6030 CNY/tonne in domestic coastal areas, partially fluctuating by 10-60 CNY/tonne. (Tianjin traders 5890; Rizhao traders 5880; Zhangjiagang traders 6030; and Guangzhou traders 5970).

Palm oil: RBD palm olein is mainly priced at 5350-5450 CNY/tonne in coastal areas, mostly up 50-70 CNY/tonne. (Tianjin traders 5420, up 70; Rizhao traders 5450, up 70; Zhangjiagang traders 5350, up 70; Guangzhou traders 5350, up 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures fell on Tuesday, but rapeseed oil futures post huge gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 100 CNY to 8050-8140 CNY/tonne in tepid trading. Trade relations between China and Canada could be deteriorated, as Canada announced its sanctions against Hong Kong. China’s rapeseed imports from Canada may still be limited amid souring tensions. In China, rapeseed crush has been low and spot rapeseed oil has also been in tight supply. Besides, China and the United States are also in uncertain relations. Hence, rapeseed oil prices keep firm at high level on bullish factors. However, China’s oil mills now are working at full capacity due to adequate soybean supply, and weekly soybean crush will maintain at a high level of over 2 mln tonnes in coming few weeks; thus, soybean oil stockpiles will keep increasing. And at present, rapeseed oil prices is much more expensive than soybean oil prices, so there only rigid demand in the rapeseed oil market.

Cottonseed oil: Cottonseed oil prices stay stable today. U.S. soybean oil futures rose on Tuesday due to a profit taking by buying oils and selling meals. Likewise, oils on Dalian Commodity Exchange also fluctuated to move higher after low opens. And cottonseed price remains 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 in June is projected to reach a growth of 12.7% from a month earlier, according to MPOA, limiting the price rises of bulk oils. Given the worries about weather condition across U.S. soybean area and uncertainty in U.S.-China relations, short-term cottonseed oil market may follow bulk oils to fluctuate to stay strong.

(USD $1=CNY ¥7.02)