Today (Nov 10), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Uruguayan soybean is offered 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. and Brazilian 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 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 fluctuate in a short term but still stay strong on the whole.

Oils: 

Summary: U.S. soybean futures rose on Monday on strong export demand and as Pfizer announced that its coronavirus vaccine was robustly effective in preventing Covid-19 and would hopefully be manufactured by the end of this year. And on China’s Dalian Commodity Exchange today, palm olein futures fluctuate to rise, and soybean oil futures stay above the previous close albeit some declines in morning trade, and they both take plunge in afternoon session. In the spot markets, soybean oil fluctuates by 20-90 CNY/tonne and palm oil goes up 130 CNY/tonne in the morning, and will probably follow futures to decline later today.

The supply and demand report by Malaysian Palm Oil Board today is in line with the market forecast, thus having little influence on Dalian futures. U.S.-China relations are expected to see a detente as Joe Biden is projected to be the winner of the presidential election, so that Chinese yuan has been rising to around 6.6, which will reduce the import cost for soybeans and oils. In addition, crush margins for new Brazilian soybean crops are profitable on Dalian, which triggers broad hedges and drags down oils to fluctuate to decline. However, the demand for oils remain strong in China, so that soybean oil stocks continue reducing. Besides, there is a lingering global inflation expectation. The overall oils prospect is still positive, and the market will hopefully pick up after this round of short-term declines. Buyers can wait for low and stable prices to make appropriate replenishment. The market broadly forecasts that the USDA will trim its estimates for U.S. soybean yields and inventories in its November supply/demand report today, and whether its bullish or bearish will depend on the scale of the reduction.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,800-7,840 CNY/tonne in domestic coastal areas, partially fluctuating by 20-90 CNY/tonne. (Tianjin traders 7800-7810; Rizhao traders 7800-7820; Zhangjiagang traders 7840; and Guangzhou traders 7780-7800). 

Palm oil: RBD palm olein is mainly priced at 6,790-6,850 CNY/tonne in coastal areas, mostly up 130-160 CNY/tonne. (Tianjin traders 6840-6850, up 130; Rizhao not available; Zhangjiagang traders 6820, up 160; Guangzhou traders 6790-6800, up 160; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures and stock markets rose on Monday, as Pfizer announced that its coronavirus vaccine was robustly effective in preventing Covid-19 and would hopefully be manufactured by the end of this year. Rapeseed oil futures stay above the previous close in spite of declines on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 60 CNY to 10,010-10,130 CNY/tonne in coastal regions in the morning, in tepid trading. 

China’s rapeseed crush remains small and mills are mainly carrying out rapeseed oil contracts now. Domestic rapeseed oil stocks are only 242,000 tonnes, a decline of 37% from a year earlier; and soybean oil stocks have also fallen to 1.21 mln tonnes. Meanwhile, there is no pressure in oils supplies due to a rise in demand from feed this year. These are supporting rapeseed oil market. However, China’s soybean crush remains higher due to huge supplies, and the consumption of rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. U.S.-China relations are expected to see a detente as Joe Biden is projected to be the winner of the presidential election, so that Chinese yuan has been strengthening recently, which will help lower down import cost. Oils futures are expanding losses in afternoon session, so buyers need to watch out if spot rapeseed oil prices will follow futures to suffer short-term adjustments.

Cottonseed oil: Cottonseed oil prices are steady and mixed in several regions with a fluctuation of 50-100 CNY/tonne today. Pfizer Inc said their coronavirus vaccine was more than 90% effective at preventing COVID-19, which could be available by the end of 2020. Stock market and U.S. soybean futures rose overnight on the news. Besides, the demand for oils is brisk. In this case, soybean oil stocks are falling consecutively. Furthermore, the bulk oils market will keep strengthening against the backdrop of global inflation expectations. Additionally, cottonseed crushing mills keep facing losses as cottonseed is still pricey, so they intend to prop up prices. On the other hand, Chinese Yuan jumped to nearly 6.6 as Joe Biden’s election as U.S. president favors a detente in relations between US and China. Oil futures swiftly slide in afternoon trading due to considerable crush margins, and cottonseed oil may be dragged down by light trading in market. It is predicted that cottonseed oil market will fluctuate at the high level in a near term but stay strong on the whole.

(USD $1=CNY ¥6.59)