Today (Aug 14), 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 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. Holders are unable to pick up soybean shipment pace at domestic ports due to thin trade. Hence, traders are less confident to prop up prices owing to increasing supply in the market. However, the supply of imported soybeans is relatively limited at Shandong ports now that traders there are controlling the quantity in circulation, which may reduce the price declines. Overall, imported soybean market is predicted to steady with a weakening trend in the short run.

Cottonseed: Cottonseed prices are steady 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. And bulk oils go up today. Accordingly, cottonseed market is supported. However, the operation rate among crushing mills is low, and cottonseed oil mills are not active in buying cottonseed due to a high price, which weighs on cottonseed market. Overall, short-term cottonseed market is likely to 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 continued to surge due to strong demand from China on Thursday, but oils futures trade below the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil fluctuates by 30-50 CNY/tonne and palm oil mostly down by 50-60 CNY/tonne. The trade reduces today, with some purchases on low-level forward basis. Domestic futures traded higher yesterday, bolstered by the rumor that state-owned companies were set to purchases 2 mln tonnes of soybean oil. But there is still no official confirmation about it. In addition, domestic crushers are forecast to maintain high operation rates due to huge soybean arrivals at ports. Meanwhile, global top producers of palm oil are expected to see higher output but weakening export in August. Hence, domestic oil futures are in correction territory today on the back of sharp rises in the previous session. However, domestic soybean oil stockpiles are not mounting higher at a quick pace, while its amount in outstanding contracts are hitting new highs for consecutive weeks. And palm oil and rapeseed oil inventories are also at low levels compared to this period in record. Add to that, mid-and-downstream buyers are stocking up packaging oils ahead of the Mid-Autumn Festival and the National Day holidays, with 88,000 tonnes of soybean oil traded yesterday. Overall, until pressure comes from the marketing of bumper U.S. soybean crops, domestic oils market will follow futures to fluctuate to the strengthening trend.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,580-6,680 CNY/tonne in domestic coastal areas, fluctuating by 30-50 CNY/tonne. (Tianjin traders 6580; Rizhao traders 6580; Zhangjiagang traders 6680; and Guangzhou traders 6670). 

Palm oil: RBD palm olein is mainly priced at 6,050-6,110 CNY/tonne in coastal areas, mostly down 50-60 CNY/tonne. (Tianjin traders 6050, down 50; Rizhao 6110, down 50; Zhangjiagang traders 6020-6040, down 60; Guangzhou traders 6050-6070, down 50; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed sharply higher due to strong export demand on Thursday, and rapeseed oil futures stay below the previous close in spite of gains on the Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 20-30 CNY at 9,070-9,140 CNY/tonne in coastal regions in tepid trading. Soybean arrivals at domestic ports are forecast to be 10.35 mln tonnes and 8.9 mln tonnes in August and September. Due to adequate supplies, soybean crush is predicted to stay high at 2.05 mln tonnes and 2.08 mln tonnes this week and next week, respectively. And domestic consumption of rapeseed oil is low due to its widening price spread with soybean oil and palm oil. However, China’s rapeseed crush stays at a low level, as its rapeseed imports are limited amid tensions with Canada. Rapeseed oil and palm oil inventories are also at low levels compared to this period in record. In addition, the market is still concerned about tensions between China and the United States. Overall, short-term rapeseed oil will maintain at high levels due to tight supplies, and the trade will be thin.

Cottonseed oil: Cottonseed oil prices stay stable. Cottonseed price is too high and manufacturers have no pressure from inventory, bolstering cottonseed oil market. Market forecasts an increase in palm oil production in August and a weaker export demand. Under the context of huge imports of soybean in later period, the operation rate will maintain a high level. Additionally, cottonseed oil trading is tepid due to slack demand, which limit the upward space of price. It is predicted that short-term cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥6.94)