Today (Jul 13), 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 go higher 150 CNY by at 3650 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, port traders are controlling the volume for trading in the market, which also bolsters the price. Overall, short-term imported soybean market is predicted to keep strengthening on bullish factors.

Cottonseed: Cottonseed prices up by 0.03 CNY/kg today. The trading volume is limited so most of traders don’t make an offer. There is not much South Xinjiang cottonseed left now. And some traders still raise the price as it will be three months before new cottonseed enters market. However, oil plants suffer from losses of crush margins due to pricey cottonseed, and some even halt the operation, which limits the trading. Besides, it is lack of vehicles as Xinjiang melons come into the market, which is unfavorable for cottonseed to out of Xinjiang. But cotton is ample in supply in North Xinjiang. Therefore, cottonseed market is depressed and will likely fluctuate to stay strong.

Oils: 

Summary: U.S. soybean futures fell noticeably last Friday due to a neutral-to-bearish USDA report and on improving crop weather forecast. However, China rejected 50,000 tonnes of unqualified non-GM rapeseed oil origin in the Europe, according to market talks. Hence, rapeseed oil futures sharply rise on China’s Zhengzhou Commodity Exchange today, and soybean oil and palm oil futures are also bolstered to swing to move higher on the Dalian Commodity Exchange. In the spot markets, soybean oil fluctuates by 20-60 CNY/tonne and palm oil up by 70-90 CNY/tonne. The trading is predicted to be tepid, with soybean oil possibly attracting some low-level purchases. Some oil mills had to suspend production last week due to swelling soybean meal inventories and temporary soybean shortages as it took time for soybeans to get unloaded, so soybean crush fell slightly by 2% to 2 million tonnes. Besides, oil mills have been quickening up soybean oil deliveries. In the week as of July 10th, China’s weekly soybean oil stocks only rose by 6,500 tonnes to 1.189 mln tonnes, and palm oil stocks fell by 7.2% weekly to 359,000 tonnes. The oil market thus keep firm on lower pressure from fundamentals. However, Malaysia’s palm oil output went above the forecast in June and is expected to see a further increased in the coming months. Besides, China’s soybean imports will be more than 10 mln tonnes both in July and August, so weekly soybean crush will maintain at over 2 mln tonnes in the coming two weeks. Overall, short-term oil market will have little downside space due to U.S. crop weather conditions and U.S.-China relations, and will keep strengthening while fluctuating frequently.

Soybean oil: GB Grade I soybean oil is mainly priced at 5860-6040 CNY/tonne in domestic coastal areas, fluctuating by 20-60 CNY/tonne. (Tianjin traders 5890; Rizhao traders 5860; Zhangjiagang traders 6040; and Guangzhou traders 5980-5990). 

Palm oil: RBD palm olein is mainly priced at 5280-5310 CNY/tonne in coastal areas, mostly up 70-90 CNY/tonne. (Tianjin traders 5310, up 70; Rizhao traders not available; Zhangjiagang traders 5310, up 90; Guangzhou traders 5280-5290, up 70; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed sharply lower last Friday, but rapeseed oil futures surge on China’s Zhengzhou Commodity Exchange today, as China is said to have rejected 50,000 tonnes of unqualified non-GM rapeseed oil origin in the Europe. Spot rapeseed oil prices go up 90-110 CNY to 8220-8290 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. And the U.S. President Donald Trump said that the relationship with China has been severely damaged, which triggers the speculation whether China will fulfill its commitments to purchase more U.S. farm products. However, due to huge soybean imports and high soybean crush, soybean oil stocks continued to increase by 0.5% weekly to 1.18 mln tonnes. And buyers are cautious now as rapeseed oil is much higher than soybean oil and palm oil in price. Overall, short-term spot rapeseed oil prices will stay at a high level due to tight supplies.

Cottonseed oil: Cottonseed oil prices remain stable today. The operation rate among crushing mills is low and cottonseed is pricey. Rumor has it that China has rejected 50,000 tonnes of unqualified non-GMO rapeseed oil origin in Europe. Rapeseed oil futures surge on Zhengzhou Commodity Exchange today on the news, and soybean oil and palm oil also fluctuate to move higher under the boost. Palm oil rises by 70-90 CNY/tonne in the spot market. Thus, cottonseed oil price is supported by these factors. However, Malaysian palm oil production in June was higher-than expected and it would see higher output in the near future. In addition, soybean arrival at ports will be upwards of 10 mln tonnes both in July and August, and soybean crush will also stay above 2 mln tonnes over the coming two weeks. Given the worries about weather condition across U.S. soybean area and uncertainty in U.S.-China relations, short-term cottonseed oil will probably follow bulk oils to fluctuate to stay strong.

(USD $1=CNY ¥7.00)