Today (Aug 4), 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. The supply of imported soybeans is relatively limited at Shandong ports, as traders there are controlling the quantity in circulation. And some small-scale plants are crushing imported soybeans instead of domestic soybeans. Hence, imported soybean prices keep stable on smooth port shipments. But the supply will be gradually increasing as there are vessels reaching ports, which will be a constraint to the market. In a hybrid of the bull and the bear, imported soybean market is predicted to steady in the short run.

Cottonseed: Cottonseed prices today remain stable and increase by 0.02 CNY/kg in several regions. 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 futures climbed on strong export sales on Monday. And on China’s Dalian Commodity Exchange today, oils futures are narrowing down gains in spite of further rises, of which soybean oil stays below the previous close. In the spot markets, soybean oil prices mostly steady and palm oil mostly goes up 20-80 CNY/tonne, both in tepid trading. The fund heat has been cooling down on the back of sharp gains yesterday, and the DCE movements get more rational today. Although China’s weekly soybean crush rose to 2.06 mln tonnes, soybean oil inventories only increased less than 10,000 tonnes to 1.246 mln tonnes due to strong demand for medium-sized packaging oils, and 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 now. Meanwhile, the market forecasts that July carryover stocks of palm oil may fall to just over 1.6 mln tonnes in Malaysia. And there are still concerns over tensions between China and the United States. Overall, the spot oils market is predicted to keep a strengthening trend, but it’s necessary to watch out for fluctuations and corrections after sharp rises in the short term.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,610-6,740 CNY/tonne in domestic coastal areas, some down by 30 CNY/tonne. (Tianjin traders 6610; Rizhao traders 6600; Zhangjiagang traders 6720; and Guangzhou traders 6740). 

Palm oil: RBD palm olein is mainly priced at 6,100-6,220 CNY/tonne in coastal areas, mostly up 20-80 CNY/tonne. (Tianjin traders 6100, up 50; Rizhao 6220, up 50; Zhangjiagang traders 6120, up 50; Guangzhou traders 6170-6180, up 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed with gains on strong export sales on Monday, and rapeseed oil futures continue to rise on China’s Zhengzhou Commodity Exchange today due to tight supplies. Spot rapeseed oil prices are offered higher by 50-100 CNY at 9,190-9,240 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 are mainly fulfilling contracts now. In addition, China and the United States are still in tensions. Hence, rapeseed oil prices are firm at high levels. But soybean arrivals are enormous in China, and the consumption of rapeseed oil is slow due to its higher prices than soybean oil and palm oil. 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 steadily increase by 50-100 CNY/tonne today. U.S. soybean futures further rose on Monday on a strong export, and oil futures on Dalian Commodity Exchange today also followed the rises. And 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. Additionally, market expects that palm oil stocks could decline to 1.60 mln tonnes above in late July. Overall, in light of concerns over U.S.-China tensions, cottonseed oil market is likely to follow bulk oils to maintain a strong trend.

(USD $1=CNY ¥6.98)