Today (Oct 14), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Non-GM soybean prices are not available at Tianjin port. Prices are almost not available and shipments also come to a standstill at ports due to strict commodity inspections. The supply of non-GM soybeans is gradually decreasing, which is supporting the market. However, imported soybean market has no advantage now due to sluggish port shipments and as new domestic soybeans are on the market and of improved quality. These are negative to the market. Overall, imported soybean market is predicted to steady with slight declines in the near term.

Cottonseed: Cottonseed prices decline by 0.02 CNY/kg in several regions today. The delivery of cottonseed is still under impact of the COVID-19 outbreak in Xinjiang. Besides, the quantity of new cottonseed appeared on the market is increasing day by day, and oil plants are cautious in purchasing cottonseed due to current high price. As a result, cottonseed price falls back slightly today. Additionally, cottonseed output this year has decreased compared with the previous year. And cottonseed oil and cottonseed meal are keeping strengthening for the moment. Thus, cottonseed market is supported. In short, cottonseed market will not drop too much and maintain a strong trend on the whole.

Oils: 

Summary: U.S. soybean futures rose in overnight trade on the export sales report, as U.S. soybean crops were rated 63% in good to excellent state versus the 64% in previous week, and in addition to slow progress in soybean planting in South America.

Oils futures open high but swing lower on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially goes down 30-70 CNY/tonne and palm oil down 10-40 CNY/tonne, in tepid trade.

As a result of higher production and weaker exports, Indonesia’s August-end palm oil stocks rose 21% month on month to 4.362 mln tonnes, so palm oil futures fell on Bursa Malaysia Derivatives. Moreover, China’s soybean crush will also return to over 2 mln tonnes this week. Hence, Dalian oils futures continue adjusting today.

But China’s soybean oil stocks are not at a high level, while rapeseed oil and palm oil stockpiles also remain low. In addition, there is a rise in demand for oils from feed, so the oils market is stress-free in terms of supply. Moreover, participants are focusing closely on weather conditions for soybean planting in South American producing regions, coupled with a lingering global inflation expectation, so funds are keen to buy dips for long positions. Hence, the oils market still has strong support.

There will be little space for this round of declines and the overall oils market will maintain an uptrend in fluctuations. Buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,460-7,600 CNY/tonne in domestic coastal areas, a partial decline of 30-70 CNY/tonne. (Tianjin traders 7460-7470; Rizhao traders 7520; Zhangjiagang traders 7500; and Guangzhou traders 7570-7600). 

Palm oil: RBD palm olein is mainly priced at 6,670-6,790 CNY/tonne in coastal areas, mostly down 10-40 CNY/tonne. (Tianjin traders 6740-6760, down 40; Rizhao 6790, down 40; Zhangjiagang traders 6690, down 10; Guangzhou traders 6670, down 40; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Tuesday, but rapeseed oil futures seesaw to edge down on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 20 CNY to 9,610-9,670 CNY/tonne in coastal regions in tepid trading.

In addition to considerable crush margins, China’s soybean stocks rose 46% year on year under huge arrivals at ports, so soybean crush will hopefully return to a high level of more than 2 mln tonnes this week. This is a burden on rapeseed oil market. But China’s rapeseed crush is not substantial as its imports are limited amid tensions between Beijing and Ottawa. Domestic rapeseed oil stocks are only 190,000 tonnes and soybean oil stockpiles are 1.34 mln tonnes, so the oils market is stress-free in terms of supply. Meanwhile, global inflation expectation is also a focus now. Overall, rapeseed oil prices will have limited declines in the near term.

Cottonseed oil: Cottonseed oil prices mainly keep steady and further increase by 100-150 CNY/tonne in individual regions today. U.S. soybean export performs well on its goo-to-excellent rate of 63%. Market sentiment is still affected by weather condition across soybean area in South America, and funds flow into market on the dips due to existing global inflation expectations. Besides, the consumption of oil for feedstuffs has increased this year. Moreover, the operation rate in cottonseed crushing mills still stays at a low level. Hence, these have offered support to cottonseed oil market. However, oil futures on China’s Dalian Commodity Exchange pare gains after high opens today. In spot market, soybean oil partly down by 30-70 CNY/tonne and palm oil down by 10-40 CNY/tonne. But bulk oils market will still maintain a strong trend in the near term. It is predicted that the market outlook of cottonseed oil may also fluctuate to go up. Buyers had better pay attention that if the falls of bulk oils will affect short-term trend of cottonseed oil.

(USD $1=CNY ¥6.75)