Today (Jul 20), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price for PNW soybeans is not offered and Brazilian soybeans at 3650 CNY at Shandong ports today, and non-GM Ukrainian soybean down 20 CNY/tonne at 5,040 CNY/tonne at Tianjin port. Traders are controlling the quantity of soybeans in circulation at Shandong ports, limiting the supply there. Add to this, imported soybeans are more attractive than domestic soybeans at present in terms of prices. Hence, soybean prices keep firm. But some 200,000-300,000 tonnes of Uruguayan soybeans are expected to arrive at Shandong ports gradually, and traders at Tianjin port have slightly lowered down prices in order to stimulate shipments. Overall, imported soybean market is predicted to swing in the short run.

Cottonseed: Xinjiang cottonseed prices fluctuate by 0.08-0.1 CNY/kg today. There is not much South Xinjiang cottonseed left now. Due to the coronavirus outbreak in Urumqi, Xinjiang, it is short of vehicles from Xinjiang to inland under the management and control, increasing the transport cost. However, oil plants suffer from losses of crush margins and the operation rate is low, which limits the trading. Moreover, the actual price is depending on different qualities of cottonseed. Therefore, cottonseed market is likely to fluctuate to stay strong.

Oils: 

Summary: U.S. soybean futures rose last Friday on improving export demand. BMD palm oil futures recorded the largest weekly rise last Friday in three and a half years, as the forecast of strong rains in Indonesia and Malaysia could affect the output of palm oil. The impact from the rumor that China rejected 50,000 tonnes of non-GM rapeseed oil continues to linger in the market, so rapeseed oil futures further soar on China’s Zhengzhou Commodity Exchange today. Soybean oil and palm oil also post strong gains on the Dalian Commodity Exchange today. In the spot markets, soybean oil follows to go up 120-200 CNY/tonne and palm oil up 100-150 CNY/tonne, attracting some low-level purchases. Although domestic crushers maintain operation rates at a very high level, mid-to-downstream buyers are rushing to make replenishment due to strong gains on the DCE, so weekly soybean oil inventories only go up 8,000 tonnes to 1,197 mln tonnes. However, China and the U.S. are still in tensions, and U.S. soybean crops are in the key growing period, which could provide fresh cues to the market at any time. In addition, stock markets broadly go up as global monetary easing has led to an inflation expectation, so that funds are bullish about the market. Overall, the oil market will keep a strengthening trend ahead of marketing pressure from U.S. soybeans, but will also fluctuate frequently driven by funds.

Soybean oil: GB Grade I soybean oil is mainly priced at 6150-6290 CNY/tonne in domestic coastal areas, a rise of 120-200 CNY/tonne. (Tianjin traders 6350; Rizhao traders 6320; Zhangjiagang traders 6470; and Guangzhou traders 6450). 

Palm oil: RBD palm olein is mainly priced at 5760-5820 CNY/tonne in coastal areas, mostly up 100-150 CNY/tonne. (Tianjin traders 5810-5820, up 100; Rizhao traders not available; Zhangjiagang traders 5800, up 110; Guangzhou traders 5760-570, up 150; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed with gains last Friday. And rapeseed oil futures again hit the limit-up on Zhengzhou Commodity Exchange today, as the news that non-GM rapeseed oil origin EU has been returned is warming. Spot rapeseed oil prices go up 270-300 CNY to 8910-9040 CNY/tonne in coastal regions in tepid trading. China’s imports of rapeseed are limited due to tensions with Canada, so domestic rapeseed crush remains low and spot rapeseed oil is also in tight supplies. Beside, China and the U.S. are also in souring relations. Weekly rapeseed oil stocks increase to 216,000 tonnes from last week, but still a decline of 55.46% from 485,000 tonnes a year earlier. Hence, rapeseed oil market keeps firm at high levels on tight supplies. However, domestic crushers maintain operation rates at a very high level due to huge soybean imports in July and August, and buyers are cautious now rapeseed oil is much higher than soybean oil and palm oil in price. Overall, spot rapeseed oil market will stay at the high level on tight supplies and as funds flow into the market due to an inflation expectation.

Cottonseed oil: Cottonseed oil prices sharply rise by 100-450 CNY/tonne today. The operation rate in cottonseed crushing mills is low and cottonseed is pricey. U.S. soybean futures closed higher on Friday on a distinct improvement in export demand. Indonesia and Malaysia report a heavy rain, which could affect palm oil production. And palm oil on Bursa Malaysia Derivatives (BMD) met a largest rise on Friday over three and a half years. Market rumor said that 50,000 tonnes of non-GM rapeseed oil originated in Europe had not been cleared by China’s Customs. Rapeseed oil still skyrocketed on Zhengzhou Commodity Exchange on the news, extending a strong rally in soybean oil and palm oil on Dalian Commodity Exchange. In the spot market, soybean oil up by 120-200 CNY/tonne and palm oil up by 100-150 CNY/tonne. Consequently, cottonseed oil price was also pushed up. But soybean arrival at ports is huge in quantity, leading to a super high operation rate. Additionally, there still exists large uncertainty in relations between U.S. and China, and markets are concerned about the weather condition across crop area as US soybean is in a critical period for growing. It is predicted that short-term cottonseed oil may follow bulk oils to go up with fluctuations.

(USD $1=CNY ¥6.99)