Today (Oct 26), 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 decline by 0.02-0.04 CNY/kg 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 fluctuate at the high level.

Oils: 

Summary: U.S. soybean futures closed higher above the resistance of 1,080 cents in strong exports and as rains and snow affected U.S. soybean harvest progress and the weather remained dry in Argentina. Oils futures follow to post sharp rises on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 110-180 CNY/tonne. The overall trade is predicted to be tepid, but with some purchases on low-level basis.

China’s soybean crush last week rose 5% to 2.20 mln tonnes, while soybean oil stocks continued decreasing 1% to 1.27 mln tonnes. Many channels are stocking up soybean oil at present, and the amount used to substitute other oils and in feed is increasing noticeably. It is said that millers in east China are waiting in line to ship out their cargoes at ports. Besides, consecutive rises in U.S. soybean prices are also lifting the import cost. And funds are buying dips with a global inflation expectation in focus. These are pushing oils to post rises again, so the oils market will probably keep an uptrend in fluctuations. But as the pandemic in Europe exists as a threat to commodity markets, the fund-supported oils market is also very unstable and will fluctuate frequently, so participants need to keep good balance of selling and buying.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,610-7,770 CNY/tonne in domestic coastal areas, a rise of 120-180 CNY/tonne. (Tianjin traders 7610; Rizhao traders 7660; Zhangjiagang traders 7690; and Guangzhou traders 7750-7770).

Palm oil: RBD palm olein is mainly priced at 6,580-6,730 CNY/tonne in coastal areas, mostly up 110-140 CNY/tonne. (Tianjin traders 6670, up 110; Rizhao 6730, up 110; Zhangjiagang traders 6620, up 140; Guangzhou traders 6580-6600, up 140; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures rose last Friday, and oils futures also open high and advance on China’s commodity exchanges. Spot rapeseed oil prices go up by 100-130 CNY to 9,790-9,840 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. Rapeseed oil stock fell 3.2% to 284,000 tonnes in coastal regions last week. Besides, domestic soybean oil inventory also fell 1% weekly to 1.27 mln tonnes. In addition, the demand for oils in feed also grows this year, so there is no pressure in oils supply. Overall, rapeseed oil market is predicted to stay at high prices but in tepid trade.

Cottonseed oil: Cottonseed oil prices mainly keep steady and increase by 50-200 CNY/tonne in some regions today. U.S. soybean futures further rose on Friday and hit 1,080 cents on strong export sales, harvest disruption under snow and rain and prolonged dryness in Argentina. Oil futures follow the rise on China’s Dalian Commodity Exchange today, and soybean oil and palm oil settle 110-180 CNY/tonne higher on the spot market. In addition, the cost of importing soybean has been pushed up by continuous rise in US soybean. Plus, funds also rush into market on the dips due to existing global inflation expectations. For these reasons, oils futures are pushed up again. On the other side, cottonseed crushing mills keep facing losses as cottonseed price remains too high now, 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)