Today (Nov 11), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybeans are not offered at Shandong port today. Imported soybeans are in tight supplies, in addition to strict commodity inspections at ports, which is bolstering the sales sentiment and bullish to the market. But domestic purchasers turn to choose domestic soybeans and have little appetite for imported soybeans. Moreover, Chins is still fulfilling the phase-one trade deal, so that its soybean imports will likely increase, which is limiting 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: The USDA lowered U.S. soybean ending stocks down by 100 mln bushels to 190 mln, which was well below the market forecast of 239 mln bushels. U.S. soybean futures closed 35.5 cents higher at 1146 cents on Tuesday on the bullish report and strong export demand, as well as the upbeat sentiment over a potential COVID-19 vaccine by Pfizer. Oils futures follow to surge on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 100-190 CNY/tonne, and both markets are predicted to be tepid trade as buyers remain cautious on huge rises today after a recent volatile trend on Dalian.

Malaysia’s Oct palm oil stockpiles fell to the lowest in over three years, with an 8.6% decline from a month earlier, according to a report by Malaysian Palm Oil Board. Moreover, China’s demand for oils has been growing in feed production, so that domestic oils shipments are at a brisk pace. Currently, China’s soybean oil stocks are at around 1.21 mln tonnes, and palm oil and rapeseed oil inventories are also low. In addition, soybean import cost is growing due to strong U.S. soybean performance, so crush margins for U.S. soybean of Dec-Feb shipments are at a loss. Hence, oils prices show rises today after previous declines. But U.S.-China relations will likely see a thaw under Joe Biden’s administration, so Chinese yuan has sharply risen to 6.6 recently. And Chinese oil mills are keeping high soybean crush. Therefore, oils market will likely see frequent fluctuations when moving upward, and participants need to keep a good balance of buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 7,890-8,020 CNY/tonne in domestic coastal areas, a rise of 100-190 CNY/tonne. (Tianjin traders 7910; Rizhao traders 7950-8000; Zhangjiagang traders 8020; and Guangzhou traders 7890). 

Palm oil: RBD palm olein is mainly priced at 6,890-6,970 CNY/tonne in coastal areas, mostly up 160-190 CNY/tonne. (Tianjin traders 6930, up 160; Rizhao 6970, up 160; Zhangjiagang traders 6910, up 160; Guangzhou traders 6890, up 190; and Xiamen not available). 

Rapeseed oil: U.S. soybean futures surged to 1146 cents on Tuesday on a bullish USDA report and strong export demand, as well as broad market enthusiasm over a COVID-19 vaccine. Rapeseed oil futures modestly advance on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 10-30 CNY to 10,020-10,140 CNY/tonne in coastal regions in tepid trading. 

China’s rapeseed oil stocks are only 242,000 tonnes , and soybean oil and palm oil stockpiles are also at low levels. There is no pressure in oils supplies due to a rise in demand from feed this year. These are supporting rapeseed oil market. But U.S.-China relations will likely see a thaw under Joe Biden’s administration, which adds to the hope that HUAWEI Meng Wanzhou will get released. Besides, China’s soybean crush remains at a very high level due to adequate stock supplies. And the consumption of rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. Overall, rapeseed oil prices will maintain a strengthening trend, but there is mainly rigid demand in the market due to dismal value-to-price ratio.

Cottonseed oil: Cottonseed oil prices steadily increase by 50-200 CNY/tonne today. USDA report on Tuesday revised soybean ending stocks estimate down by 100 million bushels to 190 million bushels, sharply lower than market-expected 239 million bushels. This report was bullish for market. And the demand for US soybean export is robust. Besides, Pfizer Inc’s breakthrough in coronavirus vaccine brings market optimism. Driven by these factors, U.S. soybean futures skyrocketed by 35.5 cents to 1,146 cents. Oil futures also surge today on China’s Dalian Commodity Exchange. In the cash market, soybean oil and palm oil grow by 100-190 CNY/tonne. In addition, the demand for oils is brisk. And oil trading goes better in China. In this case, soybean oil stocks further dip by around 1.21 mln tonnes. Also, the inventory of palm oil and rapeseed oil stays fairly low. Furthermore, US soybean stages strong performance, pulling up the cost of importing soybean. And bulk oils get back to rally after a tentative fall. Additionally, cottonseed crushing mills keep facing losses as cottonseed is still pricey, so they intend to prop up prices. It is predicted that cottonseed oil market will fluctuate at the high level in a near term.

(USD $1=CNY ¥6.61)