Today (Oct 22), 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 imported soybeans is gradually decreasing, which is supporting the market. However, buyers prefer domestic soybeans as new crops come into the market and of improved quality, and some port traders offer very high prices for imported soybeans, which also dwindles the market appetite. These are negative to the market.

Cottonseed: Cottonseed prices steadily fluctuate by 0.02-0.10 CNY/kg in several regions today. Cottonseed output this year has decreased compared with the previous year. And both cottonseed oil and cottonseed meal are keeping strengthening for the moment. Thus, cottonseed market is supported. Besides, the delivery of cottonseed is still under impact of the COVID-19 outbreak in Xinjiang. Moreover, cottonseed crushing mills keep facing losses as cottonseed price remains too high, and many mills have halted the purchase. It is expected that short-term cottonseed market may maintain a strong trend with fluctuations.

Oils: 

Summary: U.S. soybean futures continued rising on brisk exports and slow planting progress in Brazil, but the market was concerned that the resurgence of the COVID-19 pandemic in Europe could strike the demand. Oils futures widely slipped in the morning, but therewith gradually recover losses and move upward. In the spot markets, soybean oil fluctuates partially by 10-50 CNY/tonne and palm oil post a partial decline of 10-20 CNY/tonne. The trade is predicted to be good on low level, but remain thin overall due to volatile futures market.

Malaysia’s palm oil exports are robust, while its production is expected to have fallen nearly 10% month over month in the first 20 days of October. Meanwhile, Chinese consumers are greatly using soybean oil in feed and also to substitute other oils, so domestic soybean oil stocks even decline amid high soybean crush. Hence, there is little pressure in fundamentals. In addition, investors are also focusing on La Nina and a global inflation expectation. Overall, the oils market is predicted to fluctuate and move upward in the mid-to-long term, and fluctuate frequently in the short run.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,400-7,530 CNY/tonne in domestic coastal areas, fluctuating by 10-50 CNY/tonne. (Tianjin traders 7420; Rizhao traders 7400; Zhangjiagang traders 7450; and Guangzhou traders 7530). 

Palm oil: RBD palm olein is mainly priced at 6,420-6,580 CNY/tonne in coastal areas, a partial decline of 10-20 CNY/tonne. (Tianjin traders 6520, flat; Rizhao 6580, down 10; Zhangjiagang traders 6470, flat; Guangzhou traders 6420, flat; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher on Wednesday, and oils futures fluctuate to rise on China’s commodity exchanges. Spot rapeseed oil prices go up by 20-40 CNY to 9,560-9,610 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed crush remains low 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. However, China’s soybean crush is likely to climb above 2.1 mln tonnes this week due to substantial soybean arrivals at ports. Moreover, as there is big price spread for rapeseed oil against soybean oil and palm oil, some consumers have chosen to buy Grade I soybean oil, which also affects rapeseed oil demand. Overall, rapeseed oil market is predicted to keep range-bound at the high level and stay strengthening.

Cottonseed oil: Cottonseed oil prices mainly keep steady and increase by 100-150 CNY/tonne in some regions today. U.S. soybean futures rose on Wednesday on strong export demand and slow planting progress in Brazil. Malaysia’s palm oil exports also perform well. Oil futures on China’s Dalian Commodity Exchange broadly fall back in morning session but go up again later. Besides, it sees no pressure on oils fundamentals due to increased consumption of oil for feedstuffs this year. 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, which will continue underpinning cottonseed oil market. However, crushing mills are also wary of raising price considering tepid trading in market currently. Accordingly, short-term cottonseed oil price may follow soybean oil to fluctuate at high levels.

(USD $1=CNY ¥6.66)