Today (Oct 20), 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, purchasers prefer domestic soybeans as new crops come into the market and of improved quality. These are negative to the market.

Cottonseed: Cottonseed prices steadily grow by 0.04-0.05 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 rose on Monday on good exports data and as dry weather kept Brazilian soybean planting at the slowest pace in a decade. Oils futures continue falling on China’s Dalian Commodity Exchange today, but they actually stay above the previous close. In the spot markets, soybean oil partially fluctuates by 10-80 CNY/tonne and palm oil mostly up by 10-20 CNY/tonne, with better trade at low levels. In the week as of Oct 16, domestic palm oil stocks surged 21% to 420,000 tonnes, and rapeseed oil also rose 47% to 293,000 tonnes due to the arrival of crude rapeseed oil cargoes; hence, the oils market is weighed down by the outflow of funds. However, Malaysia’s palm oil exports in Oct 1-20 rose 4.3% from a month earlier, and China’s soybean oil stockpiles fell 4% to 1.29 mln tonnes. Besides, the consumption of soybean oil to replace its rivals and in feed is still large, so oil mills are propping up prices. The oils market has slowed down declines today and may follow futures to fluctuate frequently in the short term. As there is no pressure from the supply side, in addition to the focus on La Nina and an inflation expectation, the mid-to-long trend may fluctuate to move upward. Buyers are suggested to wait for low and stable prices to make replenishment in small batch and remain cautious in chasing after higher prices.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,240-7,350 CNY/tonne in domestic coastal areas, partially fluctuating by 10-80 CNY/tonne. (Tianjin traders 7240-7270; Rizhao traders 7250; Zhangjiagang traders 7260; and Guangzhou traders 7330-7350).

Palm oil: RBD palm olein is mainly priced at 6,290-6,440 CNY/tonne in coastal areas, mostly up 10-20 CNY/tonne. (Tianjin traders 6390-6400, up 20; Rizhao 6440, up 10; Zhangjiagang traders 6370, up 20; Guangzhou traders 6290, up 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Monday, but rapeseed oil futures continue declining on China’s Zhengzhou Commodity Exchanges today. Spot rapeseed oil prices drop by 10 CNY to 9,470-9,520 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush may climb above 2.1 mln tonnes this week due to adequate soybean stocks, which is weighing down rapeseed oil market. But China’s rapeseed crush is not substantial as its imports are limited amid tensions between Beijing and Ottawa, and oil mills are mainly carrying out rapeseed oil contracts. Besides, the consumption of oils in feed is large this year, so there is no pressure in the supply side. Overall, rapeseed oil is predicted to have limited declines and to stay at the high level.

Cottonseed oil: Cottonseed oil prices mainly keep steady. And some fall by 200 CNY/tonne weighed down by short-term drop in bulk oils market. Palm oil stocks in China surge by 21% to 420,000 tonnes, and rapeseed oil inventory in coastal regions also increases by 47% to 293,000 tonnes due to arrival of crude rapeseed oil. Funds outflow has caused bulk oils market to pare gains. At the moment, cottonseed crushing mills keep facing losses as cottonseed price remains too high, any many mills have halted the purchase. Consequently, the operation rate still stays at a low level. And factories have strong intention to raise cottonseed oil price, which will continue underpinning its market.

(USD $1=CNY ¥6.69)