Today (Jul 31), 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 are weakening, 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 keep steady today, some local cottonseed prices up by 0.04 CNY/kg. 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. These are supporting cottonseed market. But the operation rate in cottonseed crushing mills is low and there is not much trading volume in market, dragging down cottonseed market. 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 from high levels.

Oils: 

Summary: U.S. soybean futures rose on strong exports on Thursday, and on China’s Dalian Commodity Exchange today, soybean oil posts gains but still stay below the previous close, and palm olein declines. In the spot markets, soybean oil mostly goes up 20-50 CNY/tonne and palm oil mostly down 50 CNY/tonne. The trading is predicted to be tepid for spots, but relatively better for forward contracts. China’s soybean imports are huge and domestic crushing plants are working at very high capacities, which bring some bearish sentiment to the market.

However, July ending stockpiles for palm oil is likely to fall to a low level of 1.7-1.8 mln tonnes in Malaysia. And China’s soybean oil stockpiles are also lower than this time in previous years, and crushers still have a record of soybean oil contracts to be fulfilled. In addition, domestic palm oil and rapeseed oil inventories are also at low levels. And market participants are still concerned about China-U.S. relations, as the Trump administration is preparing to order China to sharply reduce the number of diplomats posted in the United States, according to media reports. These are all supportive of the oils market.

Overall, the oils market will keep a strengthening trend ahead of pressure from the sales of U.S. new soybeans.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,410-6,530 CNY/tonne in domestic coastal areas, mostly up 20-50 CNY/tonne with a partial decline of 10-20 CNY at ports. (Tianjin traders 6410; Rizhao traders 6420; Zhangjiagang traders 6510; and Guangzhou traders 6530). 

Palm oil: RBD palm olein is mainly priced at 5,830-5,970 CNY/tonne in coastal areas, mostly down 50 CNY/tonne. (Tianjin traders 5830, down 50; Rizhao 5970, down 50; Zhangjiagang traders 5850, down 50; Guangzhou traders 5920-5930, down 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Thursday, and rapeseed oil futures also post gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 20-30 at 8,830-8,920 CNY/tonne in coastal regions in tepid trading. China’s rapeseed imports are constrained by tensions between Beijing and Ottawa, so that domestic crush has been at a low level. Domestic crushers have almost sold out spot rapeseed oil and are mainly fulfilling contracts now. Currently, rapeseed oil stocks are only 224,000 tonnes, lower than this time in previous years. And palm oil stockpiles also declined by 6% weekly to 340,000 tonnes. Besides, China and the U.S. are in tensions. These support rapeseed oil prices to keep firm at high levels. However, domestic crushers are keeping soybean crush at a high level and soybean imports will also be huge. Moreover, buyers are cautious as rapeseed oil is much higher than soybean oil and palm oil in price. Overall, rapeseed oil prices will still stay high due to tight supplies.

Cottonseed oil: Cottonseed oil prices are stable with partial rises of 100 CNY/tonne today. U.S. soybean futures rose on Thursday due to a strong export. Soybean oil on Dalian Commodity Exchange further increased in early session, and spot soyoil mostly up by 20-50 CNY/tonne. Besides, the operation rate among cottonseed crushing mills is low and cottonseed price is too high, bolstering cottonseed oil market. On the other hand, soyoil plants expand the crushing owing to huge imports of soybean, which is bearish for the market. Nevertheless, the outstanding contracts of soybean oil hit a historical high, and both palm oil and rapeseed oil inventories stay at low levels. Moreover, U.S. media reported that the United States intends to slash the number of Chinese diplomats in US, escalating tensions between the two countries. Overall, cottonseed market is likely to fluctuate to stay strong following bulk oils.

(USD $1=CNY ¥6.98)