Today (Jul 29), 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 50 CNY at 4,950 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 domestic soybean prices continue declining. And this also intensify the panic of non-GM soybean holders at port, so that they also lower down prices to stimulate shipments. Overall, imported soybean market is predicted to swing with a weakening trend in the short run.

Cottonseed: Cottonseed prices steadily decline by 0.04 CNY/kg today. The operation rate in cottonseed crushing mills is low, which sees not many orders. And oils and meals futures continue falling recently, dragging down cottonseed market. But cottonseed is in short supply as a whole. Besides, 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. Overall, cottonseed market may pare gains tentatively but will keep strengthening on account of cottonseed shortages. After new cottonseed enters market, the price will probably fall back.

Oils: 

Summary: U.S. soybean tumbled on Tuesday due to U.S.-China tensions and as soybean crops were 72% in good-to-excellent conditions, which was above the 69% in the previous week and the market expectation. Oils futures continue falling but stay above the previous close on the Dalian Commodity Exchange today, as they have slowed down losses after two-session adjustments. In the spot markets, soybean oil partially goes up 40-90 CNY/tonne at ports and RBD palm olein fluctuates by 20-30 CNY/tonne, attracting some low-level purchases. The blending of biodiesel in Indonesia is expected to fall short of this year’s target of 9.6 mln kiloliter and to only reach 8.3 mln kl, which also pressures on the market mood. Hence, palm oil price movement is weaker than soybean oil in China today. Although China’s soybean arrivals are forecast to reach 10.1 mln tonnes in August and soybean crush remains very high, crushers now have a record of 2.35 mln tonnes in contracts to be fulfilled. Besides, there still exists an inflation expectation due to the excessive issuance of currencies, and China and the United States are still in tensions. Hence, there are limited declines in the oils markets. Short-term oil spot market may follow futures to fluctuate frequently, but the overall strong trend may have not come to an end.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,270-6,420 CNY/tonne in domestic coastal areas, a rise of 40-90 CNY/tonne. (Tianjin traders 6270; Rizhao traders 6300; Zhangjiagang traders 6420; and Guangzhou traders 6400-6420). 

Palm oil: RBD palm olein is mainly priced at 5,790-5,870 CNY/tonne in coastal areas, partially fluctuating by 20-30 CNY/tonne. (Tianjin traders 5790, flat; Rizhao not available; Zhangjiagang traders 5820, up 30; Guangzhou traders 5860-5870, flat; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures fell on Tuesday, and rapeseed oil futures also decline on Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 10-20 CNY at 8810-8890 CNY/tonne in coastal regions in tepid trading. China’s soybean arrivals are expected to reach a monthly average of 10 mln tonnes in July and August, and domestic crushing plants are maintaining extremely high operation rates. Besides, rapeseed oil is much higher than soybean oil and palm oil in price, which also limits the demand. However, China’s rapeseed imports are constrained by tensions between Beijing and Ottawa, so that domestic crush and rapeseed oil stocks both stay low. Besides, China and the U.S. are in tensions, and investors are sensitive to U.S. soybean crop weather now, which could provide cues to the market at any time. Overall, rapeseed oil prices will still stay high in spite of short-term declines, and the trading is still thin.

Cottonseed oil: Cottonseed oil prices are steady today. Some traders cut the price by 100 CNY/tonne. The good and excellent condition of U.S. soybeans reached 72%, higher than 69% a week earlier and previously market-expected 69%. And the ties between U.S. and China have been souring. US soybean futures sharply declined on Tuesday. Oil futures on Dalian Commodity Exchange continued falling back today, and some traders followed it to reduce the price. But the low operation rate in oil plants, together with pricey cottonseed are bolstering cottonseed oil market at the moment. In this case, short-term cottonseed oil market is likely to move with fluctuations. However, soybean oil for outstanding contract hits a fresh record of 2.35 mln tonnes, so soyoil mills are in no hurry to sell the goods. Moreover, considering the inflation expectation brought by global monetary oversupply and concerns over U.S.-China tensions, the overall trend of cottonseed oil may follow bulk oils to fluctuate to stay strong.

(USD $1=CNY ¥7.00)