Today (Aug 5), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is down 50 CNY to 3,600 CNY for Brazilian soybeans and down 10 CNY to 3,790-3,850 CNY/tonne for Argentine soybeans at Shandong ports, and at 4,950 CNY/tonne for non-GM Ukrainian soybeans at Tianjin port. Port traders are slow in clearing shipments as it is in the seasonally weak demand for soybeans. In addition, soybean vessels are reaching ports gradually. Hence, soybean prices slightly decline today. However, the supply of imported soybeans is relatively limited 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 today remain stable. 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 sharply fell on Tuesday on expectations for massive production, as soybean crops were rated 73% as good to excellent, above than the 72% in the previous week and the market forecast. And the market become cautious ahead of the monthly report by the MPOB, so oils futures also decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go down 50-120 CNY/tonne. The trading is predicted to be thin, though there will be still some purchases on low-level basis. Various agencies have a consensus that July palm oil exports were strong for major producing countries, but hold different opinions on July production. And in China, weekly soybean crush rose to a high level of 2.06 mln tonnes and the oils market has been in tepid trade for days, which made traders tend to stay on the sidelines. Hence, DCE and spot prices begin to pare recent gains. Merely, China’s soybean oil inventories are at a low level of 1.246 mln tonnes, 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. And there are still concerns over an inflation expectation and tensions between China and the United States. Overall, the oils market is predicted to keep a strengthening trend, and to decline to adjust in the near term. Buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,510-6,640 CNY/tonne in domestic coastal areas, down by 50-120 CNY/tonne. (Tianjin traders 6510-6520; Rizhao traders 6560; Zhangjiagang traders 6640; and Guangzhou traders 6640). 

Palm oil: RBD palm olein is mainly priced at 6,060-6,190 CNY/tonne in coastal areas, mostly down 70-110 CNY/tonne. (Tianjin traders 6060-6070, down 70; Rizhao 6190, down 110; Zhangjiagang traders 6110, down 90; Guangzhou traders 6170-6190, down 90; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed sharply lower on Tuesday, but rapeseed oil futures are moderately higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 20 CNY at 9,210-9,260 CNY/tonne in coastal regions in tepid trading. China’s rapeseed inventories and rapeseed crush are both at a historical low in the corresponding period, constrained by tensions between Beijing and Ottawa. And crushing plants are mainly carrying out contracts due to low rapeseed oil stocks. Besides, palm oil stockpiles are also low in China. Meanwhile, Malaysia's palm oil inventories at end-July likely declined to around 1.67 mln tonnes. Besides, China and the U.S. are still in tensions. However, huge soybean arrivals and high soybean crush could be bearish to the market. And the USDA is expected to raise the production estimates for U.S. soybeans in its August report, bolstered by benign crop conditions. Moreover, rapeseed oil is gradually widening its price spread with soybean oil and palm oil, which also affects the consumption. 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 meal prices keep steady today. Cottonseed is pricey and factories have no pressure from inventory, bolstering cottonseed meal market. But the huge imports of soybean, coupled with high crush still carry the potential to bear the market. U.S. soybean futures plunged on Tuesday as the good-to-excellent rate of soybean crop was as high as 73%. Meal futures on Dalian Commodity Exchange fell back today, and spot soybean meal dropped by 10-40 CNY/tonnes in coastal regions. Moreover, the demand for cottonseed meal is limited due to lower cost performance compared to soybean meal. Thus, these have dampened cottonseed meal price. It is predicted that short-term cottonseed meal price will fluctuate at a narrow range. But over the concerns about U.S.-China tensions and increasing demand in breeding, cottonseed meal market still maintain a strong trend overall.

(USD $1=CNY ¥6.98)