Today (Aug 21), 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 today. Traders 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, the demand for soybeans is slack at present, so the market is not very active. 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 maintain high levels. After new cottonseed intensively enters market, the price will probably fall back from high levels.

Oils: 

Summary: U.S. soybean futures fell on Thursday as the weather forecast for rains in the U.S. Midwest and on strong soybean yield prospects observed in the crop tour. Oils futures continue declining on the Dalian Commodity Exchange today, but losses are not big. In the spot markets, soybean oil goes down 10-90 CNY/tonne but palm oil up 20-30 CNY/tonne, in tepid trading. Malaysia’s August-ending palm oil stocks could surpass 1.80 mln tonnes due to higher production and a sharp decline in exports this month. And Chinese importers have also started to purchase profitable palm oil vessels this week. Besides, one China’s state-owned firm purchased 6-10 vessels of U.S. soybeans for shipments in November-December on Thursday. The market sentiment is subdued and funds also trim long positions, so the oils market comes under pressure. However, domestic soybean oil stocks are declining as buyers are stocking up packaging oils, and its amount in outstanding contracts has risen 2.4% to a new high of 2.61 mln tonnes. Meanwhile, domestic rapeseed oil and palm oil inventories are also at low levels. And China and the U.S. are still in tensions and there are inflation expectations. As U.S. soybeans will go marketing in September while Chinese buyers will complete replenishment at that time, the oils market in China will have small impetus for sharp gains and may fluctuate frequently, unless there are twists and turns in China-US relations. Participants need to strengthen risk prevention.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,570-6,680 CNY/tonne in domestic coastal areas, a decline of 10-90 CNY/tonne. (Tianjin traders 6580; Rizhao traders 6570; Zhangjiagang traders 6660; and Guangzhou traders 6680). 

Palm oil: RBD palm olein is mainly priced at 6,030-6,130 CNY/tonne in coastal areas, mostly up 20-30 CNY/tonne. (Tianjin traders 6120, up 20; Rizhao 6130, up 20; Zhangjiagang traders 6040, up 30; Guangzhou traders 6030-6060, up 30; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed lower on Thursday, and rapeseed oil swing slightly on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices are offered lower by 10 CNY at 9,090-9,240 CNY/tonne in coastal regions in tepid trading. China is scooping up on U.S. soybeans, so that monthly imports could exceed 8 mln tonnes in the fourth quarter. And domestic importers have also started to purchase profitable palm oil vessels this week. Moreover, the consumption of rapeseed oil is affected by its widening prices spread with soybean oil and palm oil, 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 predicted to adjust at the high levels in the near term, and buyers can wait for the moment.

Cottonseed oil: Cottonseed oil prices stay stable today. Manufacturers have no pressure from inventory due to pricey cottonseed, supporting cottonseed oil market. As Malaysian palm oil production gradually recovers in August and export sharply declines, market expects that the inventory may rise to 1.80 mln tonnes by the end of this month. This has dampened market sentiment with less buying. Consequently, oil futures on Dalian Commodity Exchange today continue falling. In the spot market, soybean oil down by 10-90 CNY/tonne. Besides, cottonseed oil trading is tepid due to slack demand, which may limit its price. It is predicted that short-term cottonseed oil market may move with fluctuations.

(USD $1=CNY ¥6.91)