Today (Jul 24), 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 at 5,030 CNY/tonne at Tianjin port. The supply of imported soybeans is relatively limiting at Shandong ports, as traders there are controlling the quantity in circulation. In addition, imported GM soybean prices have some advantages against domestic soybeans, which also supports the imported soybean market. However, domestic soybean prices keep falling, followed 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 fluctuate by 0.02 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 Thursday due to strong exports. On the Dalian Commodity Exchange today, RBD palm olein futures post sharp gains on tightening supplies in top producing countries, and soybean oil also tracks to move higher yet then keep narrowing down gains. Palm oil stockpiles in Indonesia will probably fall more than 10% from a month earlier to 3 mln tonnes in July, hitting a 16-month low. And its July production is forecast to drop to 3.54 mln tonnes, an 8.3% decline from 3.86 mln tonnes in June. In domestic spot markets, soybean oil prices mostly go up 10-80 CNY/tonne and some down 10-30 CNY/tonne, and palm oil mostly up 20-50 CNY/tonne. The trading is predicted to be tepid for spot contracts and fair on low-level forward basis, as DCE gains are gradually smaller. Funds are flowing into the market on inflation expectations due to the excessive issuance of currencies globally, and soybean oil has been in strong trading for days in China, which together enhance the market confidence. Moreover, soybean oil stockpiles are not growing very much despite high soybean crush, rapeseed oil stocks are at a low level, and palm oil inventories are also not huge; hence, domestic oil mills are seeking for higher prices. Add to that, China’s Ministry of Foreign Affairs in an announcement this morning informed the US to close its consulate general in Chengdu city, which further intensifies bilateral tensions. Overall, short-term oil market is predicted to keep a strengthening tend, but DCE soybean oil retreats this afternoon tracking wider losses in domestic stock markets, so buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6390-6570 CNY/tonne in domestic coastal areas, mostly up 10-80 CNY/tonne and some down 10-30 CNY/tonne. (Tianjin traders 6390; Rizhao traders 6440; Zhangjiagang traders 6480-6500; and Guangzhou traders 6550-6570).  

Palm oil: RBD palm olein is mainly priced at 5910-6030 CNY/tonne in coastal areas, mostly up 20-50 CNY/tonne. (Tianjin traders 5910, flat; Rizhao 6030, up 30; Zhangjiagang traders 5910, up 20; Guangzhou traders 5970, up 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures climbed on Thursday, but rapeseed oil futures slide on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 130-150 CNY at 8720-8840 CNY/tonne in coastal regions in tepid trading. Chinese buyers continue increasing soybean purchases, boosted by improving crush margins on the DCE, and Jul-Aug soybean imports will exceed a monthly average of 10 mln tonnes. Moreover, China may sell a 3-mln-tonne of GM soybeans to make room for U.S. soybeans arriving at ports in October this year, according to market sources. Rapeseed oil market is in thin trading now, as it has further widened its price spread with soybean oil and due to an adequate supply outlook of soybeans. This in turn impacts rapeseed oil prices and drags it to downside. However, rapeseed oil stockpiles have fallen to a low level of 216,000 tonnes in coastal regions, and traders are also betting on U.S. soybean crop weather now. In addition, China’s Ministry of Foreign Affairs in an announcement this morning informed the US to close its consulate general in Chengdu city, which further intensifies bilateral tensions. The overall rapeseed oil market will stay at a high level, despite short-term retreats. Buyers can stay on the sidelines at the moment.

Cottonseed oil: Cottonseed oil prices steadily rise by 50-100 CNY/tonne but decline by 50 CNY/tonne in several regions. 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. U.S. soybean futures further rose on Thursday due to strong export demand. Besides, market forecasts that Indonesian palm oil stocks will likely down to the sixteen-month low at 3 mln tonnes until late July, a reduction of over 10% from the previous month. Likewise, Indonesia is expected to produce 3.54 mln tonnes of palm oil in July, down by 8.3% from 3.86 mln tonnes in June. Consequently, palm oil on Dalian Commodity Exchange surged in early trade, driving a broad jump in soybean oil. In the spot market, soybean oil mostly up by 10-80 CNY/tonne and palm oil mostly up by 20-50 CNY/tonne. Thus, cottonseed oil market is supported by these factors. In addition, the Soybean import is huge in quantity, so crushing mills raise the operation rate. And China’s Foreign Ministry informed the US embassy in China on Friday to shut its consulate general in Chengdu, escalating tensions between the two countries. All these are bullish for bulk oils in China. It is predicted that short-term cottonseed oil may still fluctuate to trend up. Nevertheless, buyers had better take notice that soybean oil on DCE pared gains in afternoon trading.

(USD $1=CNY ¥6.99)