Today (Oct 23), 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 0.02-0.04 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 some mills have halted the purchase and have intention to force price down. It is expected that short-term cottonseed market may maintain a strong trend with fluctuations.

Oils: 

Summary: U.S. soybean futures rose for a fourth straight session in overnight trade on strong exports. Oils futures continue rising but actually stay near the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil fluctuates by 20-50 CNY/tonne and palm oil down 10-40 CNY/tonne. The overall trade is predicted to be tepid, but with some purchases on low-level basis.

Malaysia’s palm oil exports rose 4% while output reduced 10% in the first 20 days of October, bolstering palm oil futures on the BMD. And in China, soybean oil stockpiles fall unexpectedly. And the import cost of soybean is rising due to consecutive gains in U.S. soybean futures. In addition, domestic investors turn back to oils market while selling meals to arbitrage. And a global inflation expectation is still in focus. Hence, domestic oils market is expected to fluctuate to move upward in the mid-to-long term. But as the pandemic in Europe exists as a threat to commodity markets, and domestic crushers are maintaining high soybean crush while slow in delivering, short-term oils market will fluctuate frequently. Participants need to keep good balance of selling and buying.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,500-7,650 CNY/tonne in domestic coastal areas, fluctuating by 20-50 CNY/tonne. (Tianjin traders 7500-7520; Rizhao traders 7540; Zhangjiagang traders 7550; and Guangzhou traders 7650).

Palm oil: RBD palm olein is mainly priced at 6,490-6,670 CNY/tonne in coastal areas, mostly down 10-40 CNY/tonne. (Tianjin traders 6610-6630, down 10; Rizhao 6670, down 10; Zhangjiagang traders 6530, down 40; Guangzhou traders 6490-6510, down 30; and Xiamen not available).

Rapeseed oil: U.S. soybean futures further rose on Thursday on robust export sales, and oils futures also climb on China’s commodity exchanges. Spot rapeseed oil prices go up by 20-50 CNY to 9,660-9,710 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, domestic soybean oil inventory also fell 4% weekly to 1.29 mln tonnes. Hence, the oils market is under no pressure in supply. In addition, the demand for oils in feed also grows this year, and the market is also focusing on La Nina and a global inflation expectation. Overall, rapeseed oil market is predicted to stay at the high level and also fluctuate frequently. There is mainly rigid demand in the market now.

Cottonseed oil: Cottonseed oil prices mainly keep steady and increase by 100-200 CNY/tonne in some regions today. U.S. soybean futures had risen for the fourth consecutive session on Thursday on strong export sales. Malaysian palm oil exports grew by 4% while its production dipped by 10% in the first 20 days of October, boosting palm oil movements on Bursa Malaysia Derivatives. And the cost of importing soybean has been pushed up by continuous rise in US soybean. Plus, marketers take an arbitrage by buying oil and selling meal, and global inflation expectations still exist. For these reasons, bulk oils market still keeps a strong trend. 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. Therefore, short-term cottonseed oil price may fluctuate at the high level following soybean oil.

(USD $1=CNY ¥6.67)