Today (Nov 9), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Uruguayan soybean is offered higher by 50 CNY at 4,850-4,900 CNY/tonne at Shandong port today. The supply of imported soybeans is gradually decreasing, in addition to strict commodity inspections, which are bullish to the market. But domestic purchasers turn to choose domestic soybeans, so that imported soybean shipments are tepid at ports. Moreover, China is still purchasing U.S. soybeans, which will add supplies to the market. Overall, short-term imported soybean market is predicted to keep firm.

Cottonseed: Cottonseed prices decline by 0.02-0.05 CNY/kg in some regions today. 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. Besides, cottonseed output this year is lower than the previous year, which supports cottonseed market. It is expected that cottonseed price will ease off in a short term but still fluctuate to stay strong on the whole.

Oils: 

Summary: U.S. soybean futures declined last Friday on profit taking. Oils futures fluctuate to move low after rises in morning trade on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 20-50 CNY/tonne and palm oil mostly down 10 CNY/tonne, in tepid trade.

The market expects that the USDA will lower down U.S. soybean yield and its ending stocks in its November supply/demand report due Tuesday. In addition, many regions in Brazil are still dry, and U.S. soybean prices are still strong so that import cost for soybeans remains high. Meanwhile, market insiders expect that MPOB report this week will peg Malaysia’s October palm oil stocks at 1.56 mln tonnes, a month-on-month decline of 9.8% and hitting the lowest in three years. In addition, the demand for low-level oils in China is strong, so that soybean oil stocks fell further by 2.6% to 1.22 mln tonnes. Hence, fundamentals are good in the oils market at present. Besides, the market expects that U.S. will carry out a big round of financial incentives as Joe Biden has captured the presidency, and the decline in U.S. dollar index recently is also a push to the oils market. Besides, there is a lingering global inflation expectation. And domestic investors are active in buying oils and selling meals to make profits. Overall, the oils market is predicted to be bullish in the fourth quarter. But Dalian futures will see technical adjustments in the wake of sharp rises and due to severe pandemic in U.S. and Europe, so participants need to keep a lookout at short-term fluctuation risks. Dalian soybean oil futures pare most gains in afternoon trade, so buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,850-7,970 CNY/tonne in domestic coastal areas, a rise of 20-60 CNY/tonne. (Tianjin traders 7850-7870; Rizhao traders 7900; Zhangjiagang traders 7970; and Guangzhou traders 7880). 

Palm oil: RBD palm olein is mainly priced at 6,810-6,890 CNY/tonne in coastal areas, mostly down 10 CNY/tonne. (Tianjin traders 6830-6850, down 10; Rizhao 6890, down 10; Zhangjiagang traders 6810, down 10; Guangzhou traders 6810-6830, down 10; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures fell last Friday. In addition, U.S. medium have reported Joe Biden to win the presidential election, and HUEWEI Meng Wanzhou will possibly be released once there is a detente in U.S.-China relations. Hence, rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 130-170 CNY to 10,010-10,130 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush remains higher due to huge supplies, with last week’s volume rising to 2.09 mln tonnes. Moreover, the consumption of rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. These are weighing down rapeseed oil market. However, China’s rapeseed crush is small, so that rapeseed oil stocks declined by 6% weekly to 242,000 tonnes in coastal regions last week. In addition, domestic soybean oil stocks also fell 2.6% to 1.21 mln tonnes. There is no pressure in oils supplies due to a rise in demand from feed this year. Overall, rapeseed oil market is expected to have limited downside space in the short term.

Cottonseed oil: Cottonseed oil prices steadily increase by 50-200 CNY/tonne today.  U.S. soybean futures dipped on Friday on profit-taking from long liquidation, but its market still stayed strong on the whole due to prolonged dryness in many regions of Brazil. The cost of China’s soybean imports remains high. Meanwhile, the demand for oils is brisk. In this case, soybean oil stocks further falls by 2.6% to 1.22 mln tonnes. Hence, oil fundamentals are good so far. Additionally, market expects more fiscal stimulus after Joe Biden’s winning on the U.S. presidential election. US dollars fall back rapidly in recent days, which also pushes up oil trend. Furthermore, the bulk oils market will keep strengthening against the backdrop of global inflation expectations. On the other side, cottonseed crushing mills keep facing losses as cottonseed is still pricey, so they intend to prop up prices. It is predicted that the overall cottonseed oil market will stay at the high level. Bulk oil futures turn to decline in afternoon trading, so buyers need to pay attention to the risk in short-term losses.

(USD $1=CNY ¥6.61)