Today (Aug 20), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is 3,950-4,000 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 there are controlling soybean volume in circulation at Shandong ports, and port authorities are conducting strict inspections on the flow of GM soybeans; hence, soybean supply of certain grades are relatively small at ports now. However, soybeans are in lukewarm trade at ports, and imported soybean auctions still continue with offered volume mostly 100% sold and bidding prices lower than spot prices at ports. This is undermining traders’ confidence. In a hybrid of the bull and the bear, imported soybean market is predicted to swing in the short run.

Cottonseed: Cottonseed prices keep steady today. 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. Besides, cottonseed is in short supply as a whole. 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 climbed on Wednesday on export optimism and continued dryness across parts of the U.S. Midwest. Oils futures swing to fall on China’s Dalian Commodity Exchange today as funds gradually turn away from the speculation. In the spot markets, soybean oil goes down 10-40 CNY/tonne and palm oil down 40-50 CNY/tonne. The trade is tepid as buyers are staying on the sidelines on the back of a decline in DCE futures. Chinese importers have started to purchase palm oil vessels, which are profitable now. The affected sentiment forces the oils market to decline today. But as soybean crush was down slightly last week due to ballooning meal inventories last week, China’s soybean oil stockpiles also dropped by 1.3% weekly to 1.23 mln tonnes, and its amount in outstanding contracts rose 2.4% to a new high of 2.61 mln tonnes. Meanwhile, domestic rapeseed oil and palm oil inventories are also at low levels. Add to that, 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. With strong support, the oils market is predicted to have only small downside space.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,640-6,760 CNY/tonne in domestic coastal areas, a decline of 10-40 CNY/tonne. (Tianjin traders 6660; Rizhao traders 6640; Zhangjiagang traders 6750; and Guangzhou traders 6740-6760). 

Palm oil: RBD palm olein is mainly priced at 6,110-6,220 CNY/tonne in coastal areas, mostly down 40-50 CNY/tonne. (Tianjin traders 6190, down 40; Rizhao 6220, down 40; Zhangjiagang traders 6130, down 40; Guangzhou traders 6110-6130, down 40; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures edged higher on Wednesday, but rapeseed oil expand its early losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 60-70 CNY at 9,100-9,250 CNY/tonne in coastal regions in tepid trading. Chinese millers have been maintaining high soybean crushings under huge imports, and buyers have embarked on importing palm oil for deliveries in Sept-Dec due to profitable imports now. Moreover, rapeseed oil prices are much higher than that of soybean oil and palm oil at present, which is also dragging down the market. But China’s rapeseed crush stays at a low level, as its rapeseed imports are limited amid tensions with Canada. Domestic rapeseed oil and palm oil inventories are both at a low level compared to the same time in record. In addition, China and the United States are also in tensions. Overall, rapeseed oil prices are still falling, so buyers can wait for the moment.

Cottonseed oil: Cottonseed oil prices stay stable and rise by 50 CNY/tonne in some regions. Cottonseed price is too high and manufacturers have no pressure from inventory, so the price which is lower in some regions is raised. Oil futures on Dalian Commodity Exchange today fall back with fluctuations as the buying in market has receded. In the spot market, soybean oil down by 10-40 CNY/tonne and palm oil down by 40-50 CNY/tonne. Besides, cottonseed oil trading is tepid due to slack demand, which may limit its price rises. It is predicted that short-term cottonseed oil market may fluctuate to stay strong.

(USD $1=CNY ¥6.93)