Today (Aug 17), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price goes down 40 CNY to 3910-3950 CNY for Uruguayan soybeans and up 20 CNY to 3,770 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, and all 62,800 tonnes of imported soybeans were sold in the auction today. Hence, traders are less confident to prop up prices owing to frequent auctions for imported soybeans. 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. In a hybrid of the bull and the bear, imported soybean market is predicted to steady and swing slightly in the short run.

Cottonseed: Cottonseed prices steadily decline by 0.03 NY/kg 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 the delivery of cottonseed is under impact. And cottonseed oil mills are not active in buying cottonseed due to a high price, which weighs on cottonseed market. Facing cottonseed shortages, the cottonseed market is supported temporarily. Therefore, short-term cottonseed market is likely to stay at highs. After new cottonseed intensively enters market, the price will probably fall back from high levels.

Oils: 

Summary: U.S. soybean futures fell last Friday on a bumper crop outlook. But the United States and China have delayed a review of their Phase 1 trade deal initially slated for Saturday, so oils futures post huge gains on China’s Dalian Commodity Exchange today as funds increase long positions. In the spot markets, soybean oil goes up 50-110 CNY/tonne and palm olein up 100-120 CNY/tonne. The trade is predicted to be better on low-level forward basis and tepid for spots. China’s soybean crush declined 4% weekly to 1.97 mln tonnes last week, as some millers are unable to discharge soybean vessels when berths are under strain at ports and some are struggling with ballooning soybean meal inventories. Weekly soybean oil inventories thus dropped by 1.3% to 1.23 mln tonnes, while the good low-level trading brought its amount in outstanding contracts higher by 2% to 2.61 mln tonnes. Meanwhile, domestic rapeseed oil and palm oil stockpiles are 200,000 tonnes and 500,000 tonnes, respectively. The supplies now are lending support to the oils market. The overall market is predicted to keep a strengthening trend ahead of looming pressure from the marketing of bumper U.S. soybean crops, but it may fluctuate frequently as soybean crush remains high while the replenishment of packaging oils will complete in September. Participants can keep an eye on relations between China and the United States.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,650-6,840 CNY/tonne in domestic coastal areas, a rise of 50-110 CNY/tonne. (Tianjin traders 6650; Rizhao traders 6670; Zhangjiagang traders 6840; and Guangzhou traders 6770). 

Palm oil: RBD palm olein is mainly priced at 6,140-6,230 CNY/tonne in coastal areas, mostly up 100-120 CNY/tonne. (Tianjin traders 6150, up 120; Rizhao 6230, up 120; Zhangjiagang traders 6140, up 120; Guangzhou traders 6150-6160, up 100; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures fell last Friday, but rapeseed oil futures post gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 50-150 CNY at 9,120-9,300 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 rapeseed oil stocks declined by 1.5% weekly to 200,000 tonnes last week. Meanwhile, domestic soybean oil inventories also dropped by 1.3% weekly to 1.22 mln tonnes, and palm oil inventories are also at low levels compared to this period in record. Besides, relations are still uncertain between China and the United States. Hence, rapeseed oil prices still stay at high levels. However, domestic crushing plants are working at high rates due to huge soybean imports. And domestic consumption of rapeseed oil is low due to its widening price spread with soybean oil and palm oil. 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 and drop by 50 CNY/tonne in several regions. Market forecasts an increase in palm oil production in August and a weaker export demand. Under the context of huge imports of soybean in China in later period, the operation rate will maintain a high level. Additionally, cottonseed oil trading is tepid due to slack demand, which depresses its price. Besides, cottonseed price is too high and manufacturers have no pressure from inventory. In addition, a meeting originally scheduled for last Saturday to review U.S.-China Phase one trade deal which was delayed, rising tensions between the two countries. Thus, there still shows a large buying in market. Oil futures on Dalian Commodity keep growing, which posts drastic gains. In the spot market, soybean oil up by 50-110 CNY/tonne and palm oil up by 100-120 CNY/tonne. These have limited the price declines of cottonseed oil. It is predicted that short-term cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥6.94)