Today (Oct 16), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: 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 steadily grow by 0.02-0.10 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. 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 maintain a strong trend in the near term.

Oils: 

Summary: U.S. soybean futures continued rising on Thursday as strong demand from China, albeit harvest stress in the U.S. and rainfalls in Brazil. Nevertheless, European and U.S. stock markets all fell on Thursday on worsening sentiment as the U.K. and France upgraded their measures against the COVID-19 amid a second wave of pandemic in the Europe.

Oils futures fell in after-hour trade in China’s Dalian Commodity Exchange on Thursday, and Malaysia’s palm oil exports reduced 2% from a month earlier in the first half of October, so Dalian oils futures also remarkably decline today. In the spot markets, soybean oil goes down 70-100 CNY/tonne and palm oil down 100 CNY/tonne, both in tepid trade.

The outside markets are weakening now. And China’s soybean crush will return to a very high level over 2 mln tonnes this week. Besides, U.S. soybean meal futures have not only recovered losses but also hit a new high as the demand is relatively rigid and has not been severely affected. In addition, investors have completed the arbitrage of buying oils and selling meals, which is also pressure the oils market. However, soybean oil stockpiles are modest, and rapeseed oil and palm oil inventories are also low, while feed use of soybean oil shows a big increment this year; hence, the supply of oils are not under pressure. In addition, participants are focusing closely on weather conditions for soybean planting in South American producing regions. These will to some extent help limit declines in oils prices. Traders mostly take the round of declines as normal adjustment. Buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,350-7,450 CNY/tonne in domestic coastal areas, a decline of 70-100 CNY/tonne. (Tianjin traders 7350-7370; Rizhao traders 7390; Zhangjiagang traders 7400; and Guangzhou traders 7450).

Palm oil: RBD palm olein is mainly priced at 6,490-6,620 CNY/tonne in coastal areas, mostly down 100-110 CNY/tonne. (Tianjin traders 6560-6570, down 110; Rizhao 6620, down 110; Zhangjiagang traders 6520, down 100; Guangzhou traders 6490, down 100; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures closed higher on Thursday, and rapeseed oil futures open low but move higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 20-60 CNY to 9,660-9,710 CNY/tonne in coastal regions in tepid trading.

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 in coastal regions, soybean oil stockpiles are not at a high level, and palm oil inventory is also at the lowest compared to this time in record. Hence, the overall oils supplies are not under pressure, which is supporting rapeseed oil market. Due to a lingering global inflation expectation and as participants are focusing closely on weather conditions for soybean planting in South American producing region, rapeseed oil prices will probably stay at a high level in the short term. But buyers are not active in rapeseed oil market as soybean oil and palm oil prices have both declined today.

Cottonseed oil: Cottonseed oil prices mainly keep steady and further increase by 100 CNY/tonne in individual regions today. 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 with no pressure on supply. 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 tumbled overnight on gloomy market impacted by the resurgence of COVID-19 in Europe. And oil futures on China’s Dalian Commodity Exchange also markedly fall back today. In spot market, soybean oil down by 70-100 CNY/tonne and palm oil dips by 100 CNY/tonne. But bulk oils market pares gains consecutively in the near term, which may affect short-term rises of cottonseed oil. Buyers had better pay attention to it.

(USD $1=CNY ¥6.73)