Today (Aug 3), 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. Soybean shipments are not at a quick pace at ports, and soybean vessels have been reaching ports gradually. In addition, domestic soybean prices also post a weakening trend, which is also negative to imported soybean market. However,  the supply of imported soybeans is relatively limiting at Shandong ports, as traders there are controlling the quantity in circulation. In a hybrid of the bull and the bear, imported soybean market is predicted to steady in the short run.

Cottonseed: Cottonseed prices increase by 0.02-0.05 CNY/kg today. 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 intensively enters market, the price will probably fall back from high levels.

Oils: 

Summary: U.S. soybean oil futures surged nearly 2% on strong demand last Friday, as the amount of soyoil used in biodiesel in May rose to 778 million pounds, up from 672 million a month earlier. And oils futures post sharp gains on China’s Dalian Commodity Exchange today as funds swarm into the market. In the spot markets, soybean oil goes up 170-220 CNY/tonne and palm oil up 130-180 CNY/tonne. The trading is predicted to be tepid for spots, but relatively better for forward contracts. Although soybean crush rose 5.4% to 2.06 mln tonnes last week, soybean oil inventories only increased less than 10,000 tonnes to 1.246 mln tonnes due to strong demand for medium-sized packaging oils. Meanwhile, the amount of soybean oil in outstanding contracts has increased to another new high of 2.42 mln tonnes. Moreover, rapeseed oil and palm oil stocks are both at low levels in China. And in Malaysia, July palm oil ending stockpiles will likely to fall to 1.60 mln tonnes if measured by a 5% decline in July production, a 5% rise in exports and its robust domestic consumption. The supply of palm oil is tight for nearby contracts. Besides, the market is worried about tensions between China the U.S.. Overall, the spot oils market is predicted to keep a strengthening tend.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,610-6,740 CNY/tonne in domestic coastal areas, a rise of 170-220 CNY/tonne. (Tianjin traders 6610; Rizhao traders 6630-6640; Zhangjiagang traders 6720; and Guangzhou traders 6740). 

Palm oil: RBD palm olein is mainly priced at 6,010-6,150 CNY/tonne in coastal areas, mostly up 130-170 CNY/tonne. (Tianjin traders 6010-6030, up 130; Rizhao 6150, up 150; Zhangjiagang traders 6050, up 170; Guangzhou traders 6110, up 150; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose last Friday on demand from the soy-based biodiesel fuel sector, and rapeseed oil futures also post sharp gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 220-250 CNY at 9,090-9,190 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. In the week ending July 31^st, China’s rapeseed oil stockpiles fell 2.8% to 218,000 tonnes. Besides, participants are concerned over the imports of U.S. soybeans amid U.S.-China tensions. Hence, rapeseed oil prices are supported to keep firm at high levels. However, China’s soybean oil stocks rose by 0.8% to 1.246 mln tonnes last week, as soybean crush increased by 5.4% to 2.06 mln tonnes. And 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, and there will be only rigid demand in the market.

Cottonseed oil: Cottonseed oil prices rise by 150-200 CNY/tonne today. The usage of soybean oil in U.S. biodiesel industry has increased to 0.778 billion pounds in May, higher than 0.672 billion pounds in April. U.S. soybean oil soared nearly 2% on Friday on a strong demand in biodiesel. Oil futures on Dalian Commodity Exchange sharply rose today due to large buying. In the spot market, soyoil up by 170-220 CNY/tonne and palm oil up by 130-180 CNY/tonne. Moreover, cottonseed price is too high. Consequently, cottonseed oil market is bolstered by these factors. Besides, soybean crush rose by 5.4% to 2.06 mln tonnes last week, but the unfulfilled contract of soybean oil has been hitting a fresh record of 2.42 mln tonnes. Also, the inventory of rapeseed oil and palm oil still stays at low levels. According to the estimate of Malaysian palm oil export and production, that does not rule out the possibility that palm oil stocks could decline to 1.60 mln tonnes above in late July. Therefore, tightening supply of palm oil in recent months, together with concerns over U.S.-China tensions lead cottonseed oil market to maintain a strong trend following bulk oils.

(USD $1=CNY ¥7.00)