Today (Oct 12), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Non-GM Canadian soybeans are priced at 5,200 CNY/tonne at Tianjin port. The supply of imported non-GM soybeans is decreasing at ports, which is supporting imported soybean market. However, soybean shipments are small due to strict commodity inspections at Shandong ports and as the COVID-19 epidemic gets worse in Qingdao. Moreover, imported soybean is not a preferred choice as new domestic soybeans are on marketing and of higher and higher quality. In addition, China ramped up soybean purchases earlier, which is likely to further expand the supply. Overall, imported soybean market is predicted to steady with slight declines in the near term.

Cottonseed: Cottonseed prices increase by 0.07-0.12 CNY/kg today. Cottonseed is still in temporary shortage, which tentatively supports cottonseed market. But the delivery of cottonseed is still under impact of the COVID-19 outbreak in Xinjiang. However, the bullish USDA report and large buying amidst inflation expectation boost a surge in bulk oils and meals market. It is predicted that cottonseed price will extend the rally.

Oils: 

Summary: U.S. soybean futures jumped higher last Friday on a bullish USDA monthly report and as soybean planting was affected by dryness in South America. Higher cost of importing soybeans ensued thus send oils futures to trade further higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil largely increase by 150-220 CNY/tonne, and the trade is predicted to be good on low-level basis, but tepid for high spot prices. China’s soybean crush fell 26% weekly to 1.39 mln tonnes last week, and soybean oil stockpiles total only 1.34 mln tonnes now. Meanwhile, rapeseed oil and palm oil inventories are also low, and there is bigger demand for oils in feed this year. Besides, dryness related to La Nina is affecting soybean planting in South America, while heavy rains caused by it have already interrupted palm oil production in Southeast Asia. In addition, commodity and stock markets are climbing under a lingering global inflation expectation, which attracts funds to come back to the market. Overall, the oils market is predicted to maintain a strong trend in the short run.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,500-7,680 CNY/tonne in domestic coastal areas, a rise of 150-220 CNY/tonne. (Tianjin traders 7500; Rizhao traders 7520; Zhangjiagang traders 7560; and Guangzhou traders 7670-7680). 

Palm oil: RBD palm olein is mainly priced at 6,730-6,820 CNY/tonne in coastal areas, mostly up 170-180 CNY/tonne. (Tianjin traders 6810, up 180; Rizhao 6820, up 180; Zhangjiagang traders 6730-6740, up 170; Guangzhou traders 6730-6740, up 170; and Xiamen 6690, up 180). 

Rapeseed oil: U.S. soybean futures closed further higher last Friday on a bullish supply and demand report, and oils futures also continue rising on China’s commodity exchanges. Spot rapeseed oil prices go up 100-130 CNY at 9,660-9,710 CNY/tonne in coastal regions in tepid trading. China’s rapeseed crush remains at a relatively low level due to limited rapeseed imports amid tensions between Beijing and Ottawa, and rapeseed oil stocks fell slightly to 190,000 tonnes in coastal regions last week. Besides, China’s soybean crush also dropped by 25% to 1.38 mln tonnes last week, so soybean oil inventory is not a burden now. Besides, palm oil stockpiles are also at a relatively low level. These are supporting rapeseed oil prices. Funds make a comeback to the market as the focus is on dryness in South America and also due to a lingering global inflation expectation. Overall, short-term rapeseed oil is expected to stay at the high prices and in tepid trade.

Cottonseed oil: Cottonseed oil prices partly keep steady and increase by 100-200 CNY/tonne in several regions today. U.S. soybean futures soared on Friday on the bullish USDA supply and demand report and sowing progress affected by dry condition in South America, lifting the cost of importing soybean. Besides, the rainstorm in Southeast Asia has disrupted palm oil production. In this case, oil futures on China’s Dalian Commodity Exchange post a drastic growth today. Both soybean oil and palm oil surge by 150-220 CNY/tonne. Given the lingering global inflation expectation and a rise in commodity and stock markets, bulk oils market maintains a strong trend. In addition, the operation rate in cottonseed crushing mills still stays at a low level, offering support to cottonseed oil market. It is predicted that short-term cottonseed oil market may go up tracking bulk oils.

(USD $1=CNY ¥6.71)