Today (Jul 27), 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 5,050 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 rise by 0.04-0.06 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, short-term cottonseed market will likely extend the rally.

Oils: 

Summary: U.S. soybean futures fell last Friday as the United States and China informed each other to close consulates and as the weather in the U.S. Corn Belt might boost the crop outlook. And on China’s Dalian Commodity Exchange today, RBD palm olein futures swing to higher in early trading due to good export data in Malaysia, but then they trade sideways to lower; soybean oil futures move sideways to lower. In the spot markets, RBD palm olein fluctuate by 10-30 CNY/tonne and soybean oil down 20-50 CNY/tonne. The trading is predicted to be tepid for spot contracts and fair on low-level forward basis. In the week ending July 24^th, soybean crush in China dropped 5% to 1.96 mln tonnes due to swelling soybean meal inventories and as soybean ships were unable to dock after heavy rains pushed up waters, but soybean oil stocks still rose by 3% to 1.236 mln tonnes. In addition, funds are cooling down after the stock market fell, and oil futures longs also take profit on the back of rises in soybean meal prices. Hence, the oil market move sideways into the correction territory. But palm oil stocks declined 6.3% weekly to 340,000 tonne and rapeseed oil stockpiles are also at a low level, so there is no pressure in the fundamentals. Along with US-China tensions and weather-driven U.S. soybean market, the oil market is predicted to keep a strengthening trend on the whole but trade sideways in the short run, so buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,340-6,500 CNY/tonne in domestic coastal areas, mostly down 20-50 CNY/tonne. (Tianjin traders 6340; Rizhao traders 6400; Zhangjiagang traders 6440-6450; and Guangzhou traders 6500). 

Palm oil: RBD palm olein is mainly priced at 5,920-6,040 CNY/tonne in coastal areas, mostly up 20-30 CNY/tonne. (Tianjin traders 5920, up 20; Rizhao 6040, up 20; Zhangjiagang traders 5920, up 20; Guangzhou traders 5990-6010, up 30; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures declined last Friday, and rapeseed oil futures swing to lower on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 10-20 CNY at 8750-8820 CNY/tonne in coastal regions in tepid trading. China’s rapeseed oil stocks rose by 3.6% to 224,000 tonnes in the week as of July 24^th. And its soybean arrivals are predicted to hit a monthly average of 10 mln tonnes in July and August, so soybean is in huge supplies. In addition, the demand for rapeseed oil is weak as its prices is much higher than soybean oil and palm oil prices. These are weighing down rapeseed oil market. But traders are betting on U.S. soybean crop weather now and participants concerned about future imports of soybeans due to rising US-China tensions, which still support the overall oil market. Rapeseed oil market will see declines to adjust in the short term and still stay high on the whole. Buyers can stay on the sidelines temporarily.

Cottonseed oil: Cottonseed oil prices steadily rise by 50-200 CNY/tonne. The operation rate in cottonseed oil plants is low and cottonseed is still pricey, supporting cottonseed oil market. Oil futures on Dalian Commodity Exchange fluctuate to fall back today. In the spot market, palm oil fluctuates by 10-30 CNY/tonne and soybean oil declines by 20-50 CNY/tonne. Besides, soybean oil stocks maintain the rally to 1.235 mln tonnes with a rise of 3%. With soybean meal going up, investors take profit by buying oils and selling meals, which is bearish for oils prices. In this case, oils market moves sideways with fluctuations. Nevertheless, palm oil inventories have decreased by 6.3% to 340,000 tonnes, and rapeseed oil stocks still stay at low levels, with no pressure from fundamentals. Therefore, bulk oils will fluctuate to adjust in a short term but still maintain the strong trend on the whole amid worries about weather condition across soybean area and tensions in U.S.-China relations. It is predicted that cottonseed oil may still follow bulk oils to trend up with fluctuations.

(USD $1=CNY ¥7.00)