Today (Jul 23), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price today for PNW soybeans is not offered and Brazilian soybeans at 3,650 CNY at Shandong ports, and non-GM Ukrainian soybeans down 20 CNY at 5,030 CNY/tonne at Tianjin port. The supply of imported soybeans is relatively limiting, as traders are controlling the quantity in circulation at Shandong ports. Their prices at the same time have some advantages against domestic soybeans. These are supports in the imported soybean market. However, domestic soybean prices keep falling, following by non-GM soybeans at ports, which is negative to the market. Overall, imported soybean market is predicted to swing with a weakening trend in the short run.

Cottonseed: Cottonseed prices steadily rise by 0.01 CNY/kg today. Cottonseed is in short supply on the whole, but cottonseed by-products prices go strongly, so traders are active in placing orders. Due to the COVID-19 outbreak in Urumqi, Xinjiang, it is lack of vehicles from Xinjiang to inland under the management and control, increasing the transport cost. However, oil plants suffer from losses of crush margins on pricey cottonseed, and the operation rate is low, which limits the trading. Therefore, cottonseed market is likely to stay strong in a short term.

Oils: 

Summary: U.S. soybean futures rose on Wednesday on purchases by China. Zhengzhou rapeseed oil futures snap the upward trend to slump today on profit taking, after the exchange issued a risk warning letter yesterday on rapeseed oil on the back of its recent sharp rises. And on the Dalian Commodity Exchange today, soybean oil is dragged to swing to decline and palm oil futures also slow down their gains. In the spot markets, soybean oil partially fluctuates by 10-70 CNY/tonne and palm oil mostly goes up 10-40 CNY/tonne. The trading is predicted to be less for spot contracts and fair on low-level forward basis. The market goes into the correction territory on the back of sharp rises, but soybean oil is still in strong trading, with a total of over 70,000 tonnes yesterday. This has brought a relief to the influence of high soybean crush. Meanwhile, rapeseed oil stockpiles have been at a low level, and palm oil stocks are also not huge. Besides, the U.S. on Wednesday suddenly requested China to close its consulate in Houston, which could escalate tensions between the two powers. In addition, speculators will continue to focus on U.S. soybean weather conditions. Overall, soybean oil and palm oil will have little downside space in the short term and keep their strengthening trends. The DCE futures are swinging in the wake of sustained rallies, so buyers are suggested to replenish appropriately on low-level forward basis, but not to chase excessively high spot prices.

Soybean oil: GB Grade I soybean oil is mainly priced at 6350-6500 CNY/tonne in domestic coastal areas, fluctuating by 10-70 CNY/tonne. (Tianjin traders 6360; Rizhao traders 6350; Zhangjiagang traders 6450; and Guangzhou traders 6500). 

Palm oil: RBD palm olein is mainly priced at5780-5790 CNY/tonne in coastal areas, mostly up 10-40 CNY/tonne. (Tianjin traders 5790, up 20; Rizhao not available; Zhangjiagang traders 5770, up 30; Guangzhou traders 5780, up 40; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed higher on Wednesday, but rapeseed oil futures sharply decline on China’s Zhengzhou Commodity Exchange (ZCE) today as funds take profits. Spot rapeseed oil prices are offered at 8,860-8,930 CNY/tonne in coastal regions in tepid trading, i.e. a decline of 400-410 CNY/tonne on forward basis in the morning and a decline of 50-60 CNY/tonne on the midday close. The imports of rapeseed and its oil from other origins have not been much affected, although China did reject some rapeseed oil from the European countries. Moreover, domestic buyers are cautious and their demand is limited since a rally in rapeseed oil has further induced its price spread with soybean oil and palm oil. The ZCE issued a risk warning letter yesterday on rapeseed oil on the back of its recent sharp rises, a hint that the exchange could take some steps, so rapeseed oil futures slump on a cooling speculation. Generally speaking, participants should keep a lookout of the fund-driven market, as funds will add to fluctuations. But the US has requested China to shut its consulate in Houston, a sudden move worsening tensions between the two countries. And if soybean imports thus get affected, it will be bullish to domestic oil market. Therefore, participants can keep an eye on the market developments amid US-China tensions.

Cottonseed oil: Cottonseed oil prices mainly keep steady, and several traders raise the price by 100 CNY/tonne. Factories have no pressure from inventory as the operation rate among cottonseed oil plants is low, and cottonseed is still pricey, leading to a high cost. In this case, cottonseed oil market is bolstered. Soybean import is huge in quantity, so crushing mills raise the operation rate. Besides, the recent surge in rapeseed oil has caught the eyes of the exchange, so the exchange issued a risk warning on rapeseed oil futures yesterday. Rapeseed oil futures on Zhengzhou Commodity Exchange have been stagnating and slumped due to a profit taking, dragging down soybean oil on Dalian Commodity Exchange to fluctuate to fall back. In addition, the United States on Wednesday abruptly required China to close its consulate in Houston, marking a dramatic deterioration in relations between the two countries. Furthermore, markets are still concerned about the weather condition across crop area as US soybean is in a key period for growing. It is predicted that short-term cottonseed oil may still follow bulk oils to trend up.

(USD $1=CNY ¥6.99)