Today (Jul 30), 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 3,800-3,850 CNY/tonne at Shandong ports, and non-GM Ukrainian soybeans at 4,950 CNY/tonne at Tianjin port. Domestic port traders are facing poor shipments due to the overall slack demand for soybeans seasonally, and domestic soybean prices have been falling, which are negative imported soybean market. However, the supply of imported soybeans is relatively limiting at Shandong ports, as traders there are controlling the quantity in circulation. Overall, imported soybean market is predicted to post 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 futures closed lower on Wednesday on favorable weather in the U.S. crop belt, but oils futures continue to move higher on China’s Dalian Commodity Exchange today supported by funds. In the spot markets, soybean oil goes up 40-80 CNY/tonne and palm olein up 30 CNY/tonne. The trading is predicted to be tepid for spots, but relatively better for forward contracts.

July ending stockpiles for palm oil is likely to fall to a low level of 1.7-1.8 mln tonnes in Malaysia, and soybean oil traded nearly 50,000 tonnes (mostly forward contracts) in China yesterday. China’s soybean oil inventories are noticeably lower than that in the corresponding period in previous years, and crushing plants still have a record of 2.35 mln tonnes in contracts to be fulfilled. In addition, domestic palm oil stocks have fallen 6% weekly to 340,000 tonnes, and rapeseed oil stocks also remain low. Besides, there still exists an inflation expectation due to the excessive issuance of currencies, and China and the United States are still in tensions. Although soybean imports will be huge and soybean crush remains high, the oils market will still maintain a relatively strong patter on bullish factors.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,270-6,420 CNY/tonne in domestic coastal areas, a rise of 40-80 CNY/tonne. (Tianjin traders 6360; Rizhao traders 6380; Zhangjiagang traders 6470; and Guangzhou traders 6500-6520). 

Palm oil: RBD palm olein is mainly priced at 5,850-5,930 CNY/tonne in coastal areas, mostly up by 30 CNY/tonne. (Tianjin traders 5850, up 30; Rizhao 5930, up 30; Zhangjiagang traders 5850, up 30; Guangzhou traders 5920-5930, up 30; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures ended lower on Wednesday, and rapeseed oil futures narrow down losses to stay above the previous close on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered steadily at 8810-8890 CNY/tonne in coastal regions in tepid trading. 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. However, 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, so there is only rigid demand in the market. Overall, rapeseed oil prices will still stay high due to tight supplies.

Cottonseed oil: Cottonseed oil prices are stable today. Some traders raise the price by 50 CNY/tonne. U.S. soybean futures further dropped on Wednesday on nice weather across crop area. But oil futures on Dalian Commodity Exchange move higher underpinned by strong buying. In the spot market, soybean oil up by 40-80 CNY/tonne and palm oil up by 30 CNY/tonne. However, soybean oil hits a fresh record of 2.35 mln tonnes in outstanding contract, 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, bulk oils still keep strengthening on the whole. It is expected that cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥6.99)