Today (Aug 27), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: The reference price is 3,910-4,000 CNY for Uruguayan soybeans and 3,730-3,770 CNY/tonne for Argentine soybeans at Shandong ports today. Soybean shipments are at a slow pace as the market is not active when there is not much demand. However, soybean volume in circulation are limited at Shandong ports, and some soybean vessels are still waiting to go through customs, which lend some support to the market. Dominated by such bearish factors, imported soybean market is predicted to go weakening.

Cottonseed: Cottonseed prices drop by 0.01 CNY/kg. Many places in Xinjiang have been locked down amid the COVID-19 pandemic, 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. But new cottonseed has yet to go marketing, and cottonseed is in short supply as a whole, so 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 highs.

Oils: 

Summary: U.S. soybean futures rose on Wednesday, bolstered by continuing sales to China and as hot and dry weather pattern in the Midwest could damage soybean yield. Domestic investors are selling meal and adding oils positions in the wake of a rise in crude oil prices due to a hurricane, so oils futures are climbing on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 20-80 CNY/tonne and palm oil up 30-40 CNY/tonne.

Malaysia’s Southern Peninsular Palm Oil Millers Association estimated August 1-25 output in the country dropped 1.3% from the previous month, which could bring August production flat with that in July. Meanwhile, data from a shipping agency showed that Malaysia's palm oil exports for Aug 1-25 fell 14.3-16.4% from a month earlier, compared to a decline of 18-21% in the first twenty days. These could together reduce slightly the pressure of a higher month-ending stockpiles outlook. In addition, the news that Indonesia plans to finish research into biodiesel containing 40% palm oil (B40) by November also bolstered Malaysian palm oil futures to rebound, and a rise in U.S. soybean prices have also increased the import cost. Hence, domestic oils market goes stronger today.

But China’s soybean stocks amount to 6.36 mln tonnes in coastal regions due to huge imports, an increase of 18% from a year earlier. And soybean oil stocks also rose 3% weekly to 1.26 mln tonnes, as the crush remained at a high level. Besides, new U.S. soybeans will go market en basse soon, which may also limited the upward space of the oils market. Overall, domestic oils market is predicted to keep strong and fluctuate in the short term.

Soybean oil: GB Grade I soybean oil is mainly priced at 6,660-6,760 CNY/tonne in domestic coastal areas, a rise of 20-80 CNY/tonne. (Tianjin traders 6660-6670; Rizhao traders 6660; Zhangjiagang traders 6750-6760; and Guangzhou traders 6730-6760). 

Palm oil: RBD palm olein is mainly priced at 6,000-6,120 CNY/tonne in coastal areas, mostly up 30-40 CNY/tonne. (Tianjin traders 6120, up 40; Rizhao 6120, up 40; Zhangjiagang traders 6000, up 40; Guangzhou traders 6060-6080, up 30; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose on Wednesday. Meanwhile, a rise in U.S. soybean prices have also increased the import cost, and domestic investors are adding oils positions due to lingering U.S.-China tensions and inflation expectations; hence, domestic oils futures are higher today. Spot rapeseed oil prices are offered lower by 10-50 CNY at 8,980-9,080 CNY/tonne in coastal regions in tepid trading. China’s rapeseed crush remains at a low level as its imports is limited amid tensions between Beijing and Ottawa, and crushing plants are mainly carrying out contracts at present. Domestic rapeseed oil stocks are only 210,000 tonnes in coastal regions. These are supporting rapeseed oil prices. However, domestic soybean crush stays stubbornly high due to huge soybean imports, so that soybean oil stocks also rose 3% to 1.26 mln tonnes last week. Moreover, the consumption of rapeseed oil is small due to its widening price spread with soybean oil and palm oil. Overall, rapeseed oil market is predicted to stay high due to tight supplies and to stay in thin trade.

Cottonseed oil: Cottonseed oil prices stay stable and rise by 50 CNY/tonne in individual regions today. With China’s continuous purchasing and market’s concerns about yield reduction at harvest affected by hot and dry conditions across the Midwest, U.S. soybean went up further on Wednesday. Besides, market investors take an arbitrage by buying oils and selling meals as the hurricane boosts crude oil to go strong. Oil futures on Dalian Commodity Exchange (DCE) rise today. In the spot market, soybean oil up by 20-80 CNY/tonne and palm oil up by 30-40 CNY/tonne. Additionally, manufacturers have no pressure on inventory as cottonseed is pricey, bolstering cottonseed oil market. And soybean crush remains super high amid huge imports. Soyoil inventories increase by 3% from a week earlier to 1.26 mln tonnes, which is unfavorable to oils market. Moreover, 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 fluctuate at high levels.

(USD $1=CNY ¥6.89)