Today (Jul 10), 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 4100 CNY, and Brazilian soybeans 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 as some buyers turn to imported soybean market. In addition, PNW and Argentine soybeans are not in huge supplies at ports now, so traders are trying to prop up prices. 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 keep firm 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. These are unfavorable for oil plants to purchase cottonseed and some even halt the operation. Thus, the trading volume is limited. 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.

Oils: 

Summary: U.S. soybean futures rose to over 900 cents on Thursday due to hot, dry weather and good export data, but U.S. crude oil slipped over 3% to settle below $40. And oil futures also snap gains to decline on China’s Dalian Commodity Exchange today because of profit-taking, with a sharp loss in palm oil futures. In the spot markets, soybean oil goes down 10-40 CNY/tonne and palm oil down 70-90 CNY/tonne, both in tepid trading. Malaysia’s crude palm oil production grew 14% from May to 1.885 million tonnes in June, Malaysian Palm Oil Board said on Friday. Meanwhile, China’s soybean oil stocks will probably break through 1.2 mln tonnes this week due to huge soybean imports and extraordinarily high soybean crush. And domestic demand is thin in the market, as buyers have been very cautious. Hence, the oil market falls under pressure. 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. Therefore, the oil market is expected to have little downside space this round. Overall, the market will probably keep range-bound and strengthening. Buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 5900-6040 CNY/tonne in domestic coastal areas, down 10-40 CNY/tonne. (Tianjin traders 5870-5880; Rizhao traders 5880; Zhangjiagang traders 6020; and Guangzhou traders 5940-5960). 

Palm oil: RBD palm olein is mainly priced at 5250-5380 CNY/tonne in coastal areas, mostly down 70-90 CNY/tonne. (Tianjin traders 5350, down 70; Rizhao traders 5380, down 90; Zhangjiagang traders 5280, down 90; Guangzhou traders 5250-5260, down 90; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Thursday, and rapeseed oil futures also post gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 10-20 CNY to 8110-8200 CNY/tonne in tepid trading. China’s imports of rapeseed are limited due to tensions with Canada, so that domestic rapeseed crush also remains low. Besides, China and the United States are also in souring relations. Hence, rapeseed oil market is bolstered. However, domestic oil mills are seeking to work at full capacity due to huge soybean imports and as soybeans could easily get heat waste in summer, so soybean oil stockpiles are expected to exceed 1.2 mln tonnes this week. Besides, global catering industry is still being affected by the coronavirus outbreak. Therefore, bulk oil prices will have limited rises due to bearish fundamentals. Overall, rapeseed oil prices will stay at a high level due to tight supplies, but the market will still be in thin trading.

Cottonseed oil: Cottonseed oil prices remain stable today. Cottonseed price is till high, boosting cottonseed oil price. U.S. crude oil lowered above 3% and dropped below $40. And oils futures on Dalian Commodity Exchange (DCE) stopped rising and started to fall affected by the profit taking, with a distinct decline in palm oil. In the spot market, soybean oil and palm oil down by 10-40 CNY/tonne and palm oil down by 70-90 CNY/tonne. Besides, Malaysian palm oil production in June, at 1,885,000 tonnes, was up 14% from the previous month and beyond expectation. Meantime, soybean arrival is huge in quantity and soybean crush is extremely high. In this case, soybean oil stocks will likely exceed 1.2 mln tonnes this week, so the market of bulk oils is curbed by fundamentals. Given the worries about weather condition across U.S. soybean area and uncertainty in U.S.-China relations, short-term oils market may not drop too much, and cottonseed oil will probably follow bulk oils to fluctuate to stay strong.

(USD $1=CNY ¥6.99)