Today (Aug 10), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is 3,620 CNY for Brazilian soybeans and down 40 CNY for 3,750-3,790 CNY/tonne for Argentine soybeans at Shandong ports, and 4,800 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. These factors are cracking down on traders’ confidence. 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 fluctuate by 0.01-0.06 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 trading in cotton by-products gets worse as bulk oils pare gains. Moreover, cottonseed oil mills are not active in buying cottonseed due to a high price, which weighs on 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 fell last Friday as favorable weather conditions bolstered an abundant harvest outlook, and oils futures broadly decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 40-120 CNY/tonne and palm olein down 30-50 CNY/tonne. Funds were cracked down when speculating on tight supplies in the coming fourth quarter after a state-owned oil group sold a huge quantity of soybean oil across the country last week, so domestic oils prices are pressured to downside today. However, soybean oil stocks only increased by 0.3% to 1.243 mln tonnes last week, even when soybean crush stayed high at 2.04 mln tonnes. Meanwhile, its amount in outstanding contracts surged 6% weekly to a new high of 2.553 mln tonnes, and the demand for packaging soybean oil is strong in the market. Besides, domestic palm oil stockpiles also remain low in spite of a weekly rise of 22% to 354,000 tonnes, and rapeseed oil stocks are also low. In addition, millers are propping up prices due to US-China tensions and inflation expectations. But as DCE crushing margins for soybeans are good due to lower U.S. soybean prices and stronger CNY, short-term oils prices will continue to swing to decline and buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,360-6,490 CNY/tonne in domestic coastal areas, down 40-120 CNY/tonne. (Tianjin traders 6390; Rizhao traders 6360; Zhangjiagang traders 6480; and Guangzhou traders 6480-6490). 

Palm oil: RBD palm olein is mainly priced at 6,020-6,050 CNY/tonne in coastal areas, mostly down 30-50 CNY/tonne. (Tianjin traders 6020, down 30; Rizhao not available; Zhangjiagang traders 6050, down 30; Guangzhou traders 6070, down 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures traded lower last Friday, and rapeseed oil futures post sharp losses due to profit-taking on Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 290-350 CNY at 9,030-9,390 CNY/tonne in coastal regions in tepid trading. China’s soybean crush totaled 2.04 mln tonnes last week due to huge soybean supplies. Domestic buyers are cautious in rapeseed oil market now as its price is much higher than rival soybean oil. Rapeseed oil prices thus decline on lukewarm trade in the market. But China’s rapeseed crush stays at a low level, as its rapeseed imports are limited amid tensions with Canada. In the week as of Aug 7^th, domestic rapeseed oil totaled 203,000 tonnes, a decline of 6.8% from previous week. Besides, China and the U.S. are also in souring tensions. Short-term rapeseed oil prices are declining, and buyers can stay on the sidelines temporarily.

Cottonseed oil: Cottonseed oil prices stay firmly with partial fluctuations of 100 CNY/tonne. Cottonseed price is too high and manufacturers have no pressure from inventory, which leads some traders to raise the cottonseed oil price. However, a sharp fall in U.S. soybean futures, coupled with a rise in CNY cause the cost of importing soybean to decline distinctly. Thus, the crush margins of soybean futures have increased. Also, U.S. soybean expects a bumper harvest owing to the favorable weather across crop area. In this case, US soybean futures closed lower on Friday. And oil futures on Dalian Commodity Exchange broadly fell today. In the spot market, soybean oil down by 40-120 CNY/tonne and palm oil down by 30-50 CNY/tonne. Accordingly, the trading in cottonseed oil is weighed down by these factors, and the price in some regions has been cut. It is predicted that short-term cottonseed oil market may fall back with fluctuations.

(USD $1=CNY ¥6.96)