Today (Jul 28), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price today for Brazilian soybeans is 3,650 CNY and Argentine soybeans 3,850 CNY/tonne at Shandong ports, and non-GM Ukrainian soybeans down 20 CNY at 5,000 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. This supports the imported soybean market. But as domestic soybean prices keep falling, port traders are also lowering down non-GM soybean prices to stimulate shipments, 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 0.01-0.02CNY/kg today. Cottonseed is in short supply on the whole, but cottonseed by-products prices go strongly. Many places in Xinjiang have been locked down due to the COVID-19 outbreak, so it is lack of vehicles from Xinjiang to inland, 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. Overall, cottonseed market will keep strengthening on account of cottonseed shortage. But oil and meal futures plunged on Tuesday, dragging down cottonseed market. Buyers can wait and see.

Oils: 

Summary: Chicago soybean futures closed higher on Monday due to strong export data, but Malaysian palm oil futures fell nearly 4% on profit-taking as well-known industry analysts were bearish about palm oil prices in the fourth quarter. And oils futures also track to decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and RBD palm olein drop 60-120 CNY/tonne in tepid trading. This round of declines can be attributed to the exodus of funds, as fundamentals are little changed in the oils market. China’s soybean oil inventories rose 3% from the previous week to 1.236 mln tonnes but still lower than that in previous years, while domestic crushers still have a record of 2.35 mln tonnes in contracts to be fulfilled. And a domestic leading firm is still purchasing soybean oil for trade. Meanwhile, domestic palm oil stockpiles have also dropped by 6.25% weekly to 340,000 tonnes, and rapeseed oil stocks also stay low. Besides, China and the United States are still in tensions, and investors are sensitive to U.S. soybean crop weather now. And there still exists an inflation expectation due to the excessive issuance of currencies. Hence, it is still unable to confirm the end of a strong trend in the oils market, for these may be huge declines during the upward process. Buyers can wait with patience for low and stable decline to see if it is necessary to make replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,240-6,400 CNY/tonne in domestic coastal areas, mostly down 60-120 CNY/tonne. (Tianjin traders 6240; Rizhao traders 6290; Zhangjiagang traders 6350; and Guangzhou traders 6380-6400). 

Palm oil: RBD palm olein is mainly priced at 5,880-5,940 CNY/tonne in coastal areas, mostly down 90-120 CNY/tonne. (Tianjin traders 5820, down 110; Rizhao 5940, down 110; Zhangjiagang traders 5840, down 90; Guangzhou traders 5880-5890, down 120; and Xiamen not available). 

Rapeseed oil: Chicago soybean futures edged higher on Monday. Dalian soybean oil and RBD palm olein futures slide on profit taking, while rapeseed oil futures buck the trend to climb on the Zhengzhou Commodity Exchange due to tight spot supplies. Spot rapeseed oil prices are offered higher by 50-70 CNY at 8820-8900 CNY/tonne in coastal regions in tepid trading. China’s rapeseed imports are constrained by tensions between Beijing and Ottawa. Domestic rapeseed crush remains low and spot rapeseed oil is in tight supplies, so oil mills are mainly carrying out previous contracts. China’s rapeseed oil stocks total 224,000 tonnes this week, 56% below 504,800 tonnes from a year earlier. Besides, China and the United States are also in tensions. Hence, rapeseed oil prices are buoyed to keep firm at high levels. But domestic crushers maintain very high operation rates due to huge soybean imports, and the demand for rapeseed oil is weak as its prices is much higher than soybean oil and palm oil prices. Overall, a sharp decline in soybean oil and palm oil prices may also drag down rapeseed oil market, so buyers can stay on the sidelines now.

Cottonseed oil: Cottonseed oil prices are steady today. The operation rate in cottonseed oil plants is low and cottonseed is still pricey, supporting cottonseed oil market. Analysts bore the fourth-quarter outlook for palm oil, so many bulls close out for taking profit. Consequently, palm oil on Bursa Malaysia Derivatives (BMD) declined on Monday as much as nearly 4%. And oil futures on Dalian Commodity Exchange (DCE) broadly fell today. In the spot market, soybean oil and palm oil down by 60-120 CNY/tonne. Being dampened by the capital flights, oils market pared gains. Nevertheless, palm oil inventories in China have dropped by 6.3% to 340,000 tonnes, and rapeseed oil stocks also stay at low levels, with no pressure from fundamentals. In addition, the rally is not over yet due to U.S.-China tensions, market’s worries about weather condition across soybean area and inflation expectations brought by monetary oversupply. But bulk oils market will post a distinct decline in a short term, which may drag down cottonseed meal to move with fluctuations. Buyers can stay on the sideline for the moment.

(USD $1=CNY ¥6.99)