Today (Aug 18), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is 3,910-3,950 CNY for Uruguayan soybeans and 3,770 CNY/tonne for Argentine soybeans at Shandong ports, and 4,800 CNY/tonne for non-GM Ukrainian soybeans at Tianjin port. Traders are unable to pick up soybean shipment pace at domestic ports due to thin trade, and imported soybean auctions still continue, with bidding prices lower than spot prices at ports. Hence, traders are less confident to prop up prices. 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 swing in the short run.

Cottonseed: Cottonseed price steadily increases by 0.01 NY/kg today. Cottonseed is in short supply as a whole. Facing cottonseed shortages, the cottonseed market is supported temporarily. Besides, many places in Xinjiang have been locked down due to the COVID-19 outbreak, so the delivery of cottonseed is still under impact. And cottonseed oil mills are not active in buying cottonseed due to a high price, which weighs on cottonseed market. 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 climbed on Monday as concerns mounted that a lack of precipitation in the coming week could damage soybean yield and on purchases of China. And oils futures slow down gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil prices steady and palm oil mostly down 20-40 CNY/tonne. The trade is predicted to be better on low-level forward basis and tepid for spots. Malaysia’s palm oil exports were 694,402 tonnes in the first half of August, down 16.5% from a month earlier. Chinese importers bought 10 vessels of palm oil for deliveries in Oct-Dec, after import margins got improved yesterday. Gains in DCE oils are capped by cooling funds.

But there is little pressure in terms of supply in domestic oils markets. Soybean oil stocks fell 1.3% weekly to 1.23 mln tonnes, as soybean crush dropped by 4% due to ballooning soybean meal inventories. Meantime, its amount in outstanding contracts rose 2.4% to a new high of 2.61 mln tonnes on strong purchases at low-level prices. And rapeseed oil and palm oil stockpiles are 200,000 tonnes and 500,000 tonnes, respectively. Besides, China and the U.S. are still in tensions and there are inflation expectations. Hence, funds are still buying dips for long positions in the market. Overall, the oil market is predicted to maintain a strengthening trend, but it may follow futures to slow down rises. Participants need to prevent risks of short-term fluctuations.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,650-6,750 CNY/tonne in domestic coastal areas. (Tianjin traders 6650; Rizhao traders 6670; Zhangjiagang traders 6750; and Guangzhou traders 6750). 

Palm oil: RBD palm olein is mainly priced at 6,100-6,200 CNY/tonne in coastal areas, mostly down 20-40 CNY/tonne. (Tianjin traders 6160-6170, down 30; Rizhao 6200, down 20; Zhangjiagang traders 6110, flat; Guangzhou traders 6100-6120, down 40; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Monday, and rapeseed oil futures also climb on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered higher by 10-30 CNY at 9,130-9,330 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 are only 200,000 tonnes as of August 14th, so that millers are mainly carrying out contracts. Meanwhile, domestic soybean oil inventories were down 1.3% weekly to 1.23 mln tonnes and palm oil stockpiles were at a low level of 500,000 tonnes. Little pressure in supplies support rapeseed oil prices now. However, domestic crushing plants are working at high rates due to huge soybean imports. And buyers are cautious in the rapeseed oil market 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, but it is necessary to prevent short-term prices as ZCE rapeseed oil futures are moving lower.

Cottonseed oil: Cottonseed oil prices stay stable and rise by 50-100 CNY/tonne in some regions. Cottonseed price is too high and manufacturers have no pressure from inventory. Weather forecast calls for lack of showers in soybean area in the next week, raising market’s concerns over the crop yield which could be damaged by draught weather. Besides, U.S. soybean futures sharply rose on Monday as China actively bought US soybeans. And oil futures on Dalian Commodity Exchange today continued rising. These have supported cottonseed oil price. In addition, Malaysian palm oil exports were 694,402 tonnes in the first half of August, a decline of 16.5% month-on-month. And importers had bought another 10 cargoes of palm oil for shipment in October-December. Moreover, cottonseed oil trading is tepid due to slack demand, which may depress its price. It is predicted that short-term cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥6.93)