Today (Jul 9), 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 is higher by 100 CNY at 4100 CNY, and Brazilian soybeans higher by 40 CNY at 3500-3600 CNY. Imported soybeans are more attractive than domestic soybeans at present in terms of prices, so that the trading has also turned better and port shipments are also at a brisker pace. In addition, PNW and Argentine soybeans are not in huge supplies at ports now. Hence, imported soybean prices are bolstered to go up today. But some 200,000 tonnes from Uruguay is expected to reach ports gradually, which will increase the port stocks at that time. Overall, imported soybean market is predicted to fluctuate in the short term.

Cottonseed: Cottonseed prices stay stable 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 are still raising 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 Wednesday due to technical selling, but oil futures swing to move higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 10-30 CNY/tonne. As buyers are staying on the sidelines, the market is in tepid trading. In spite of further rises on the DCE, fundamentals are poor in the oil market at present. China’s soybean oil stocks rose by 6% weekly to 1.19 mln tonnes due to huge soybean imports and high soybean crush. And RBD palm olein imports are predicted to hit a monthly average of 400,000 tonnes in the recent two months. Besides, monthly palm oil production could pick up to over 2 mln tonnes in Malaysia due to seasonal growth. There is lukewarm demand in the market now as buyers are cautious on the back of consecutive rises on the DCE. These will intensify fluctuations in the oil market. However, U.S. soybean crops are setting pods now and uncertainty still remains between China and the United States; hence, participants will still continue to focus on U.S. crop weather and U.S.-China relations. Overall, the oil market is predicted to keep strengthening in the near term.

Soybean oil: GB Grade I soybean oil is mainly priced at 5900-6040 CNY/tonne in domestic coastal areas, a rise of 20-30 CNY/tonne. (Tianjin traders 5900; Rizhao traders 5900; Zhangjiagang traders 6040; and Guangzhou traders 5980). 

Palm oil: RBD palm olein is mainly priced at 5360-5460 CNY/tonne in coastal areas, mostly up 10-20 CNY/tonne. (Tianjin traders 5410, up 10; Rizhao traders 5460, up 20; Zhangjiagang traders 5360, up 20; Guangzhou traders 5360-5380, up 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures declined on Wednesday, but rapeseed oil futures extend gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 40 CNY to 8090-8180 CNY/tonne in tepid trading. The imports of rapeseed into China is still limited, as China and Canada are still in tensions. As a result, rapeseed crush has been low and spot rapeseed oil has also been in tight supply. And rapeseed oil traded 34,000 tonnes yesterday for Oct-Dec shipments. Besides, relations have also been souring between China and the United States. Hence, rapeseed oil market will keep a strengthening trend on bullish factors. But domestic soybean oil stocks have been picking up due to high soybean crush and huge soybean imports, so buyers are still not vigorous at present.

Cottonseed oil: Cottonseed oil prices remain stable today. Oils on Dalian Commodity Exchange (DCE) still fluctuate to go up today. In the spot market, soybean oil and palm oil rise by 10-30 CNY/tonne. And cottonseed price is still high. Consequently, 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 monthly production is likely to hit a super high of over 2 mln tonnes as the seasonal output stimulation has been advanced, so the price rises of bulk oils are limited by fundamentals. 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 ¥7.01)