Today (Aug 6), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is 3,600 CNY for Brazilian soybeans and 3,790-3,850 CNY/tonne for Argentine soybeans at Shandong ports, and 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, traders have slightly loosened their prices. 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 with a weakening trend in the short run.

Cottonseed: Cottonseed prices today mostly 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 relatively low and the trading in market is light, dragging down cottonseed market. Overall, cottonseed market 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 further fell on Wednesday, as the market expected the crop yield to reach a record of 54 bu/acre. And oils futures continue declining but narrow down losses on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 10-50 CNY/tonne and palm oil partially fluctuates by 10-30 CNY/tonne. The trading is predicted to be thin, though there will be still some purchases on low-level basis. The decline on the DCE is smaller today in the wake of wide corrections in the previous session. And yesterday, a leading enterprises made strong forward-basis purchases in the market and some distributors were delighted to clinch deals, so that soybean oil traded a total of 67,000 tonnes. Meanwhile, soybean oil stocks are only 1.246 mln tonnes now, while its amount in outstanding contracts have set a fresh high of 2.42 mln tonnes. Moreover, rapeseed oil and palm oil inventories also remain low. All these are bullish to the oils market. Besides, there are still concerns over an inflation expectation and tensions between China and the United States. Overall, the oils market is predicted to have limited declines and to keep a strengthening trend.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,480-6,600 CNY/tonne in domestic coastal areas, down by 10-50 CNY/tonne. (Tianjin traders 6480-6490; Rizhao traders 6490; Zhangjiagang traders 6600; and Guangzhou traders 6600). 

Palm oil: RBD palm olein is mainly priced at 6,070-6,190 CNY/tonne in coastal areas, partially fluctuating by 10-30 CNY/tonne. (Tianjin traders 6070, flat; Rizhao 6190, flat; Zhangjiagang traders 6120, up 10; Guangzhou traders 6180, up 10; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed further lower on Wednesday, but rapeseed oil futures extend gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 70-90 CNY at 9,300-9,370 CNY/tonne in coastal regions in tepid trading. China’s rapeseed crush stays at a low level, as its rapeseed imports are limited amid tensions with Canada. Domestic oil mills are mainly carrying out contracts as they have sold ou spot rapeseed oil. Currently, rapeseed oil stocks are only 217,000 tonnes in domestic coastal regions, which is the lowest this time in previous years. Meanwhile, domestic palm oil inventories are also low, and China and the U.S. are still in tensions. Hence, rapeseed oil prices keep firm at high levels. But soybean arrivals at domestic ports are huge, and crushers also trying to work at maximum capacity. Moreover, the consumption of rapeseed oil is weak due to its higher prices than soybean oil and palm oil. Overall, rapeseed oil prices will still stay high due to tight supplies, and the market is expected to be in thin trade.

Cottonseed oil: Cottonseed oil prices stay firmly today. Cottonseed price is too high and manufacturers have no pressure from inventory, which underpins cottonseed oil market. Institutions forecast that US soybean yield could set a record at 54 bu/acre due to a good crop condition. U.S. soybean futures further declined on Wednesday. And oil futures on Dalian Commodity Exchange continued falling today. In the spot market, soybean oil down by 10-50 CNY/tonne. In this case, cottonseed oil market is dragged down 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 hit a fresh record of 2.42 mln tonnes. Also, the inventory of rapeseed oil and palm oil still stays at low levels. Accordingly, in light of inflation expectations and concerns over U.S.-China tensions, cottonseed oil market is likely to stagnate and turn to be stable in a short term but follow bulk oils to maintain a strong trend as a whole.

(USD $1=CNY ¥6.94)