Today (Nov 23), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered at 4,850-4,900 CNY/tonne and Uruguayan soybeans at 4,900-4,950 CNY/tonne at Shandong port today. Domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans. And U.S. democratic candidate Joe Biden won the presidential election, which will make for a detente in relations between China and the US. In addition, China is still purchasing soybeans from the U.S. and Brazil, which will increase the arrivals at ports and thus be negative to imported soybean market. However, imported soybeans are in tight supplies, in addition to strict commodity inspections at ports, which is bolstering the market. Overall, short-term imported soybean market is predicted to steady.

Cottonseed: Cottonseed prices fluctuate by 0.02-0.03 CNY/kg in several 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 and cottonseed oil stays firm, which supports cottonseed market. It is expected that cottonseed price will fluctuate narrowly in a short term and keep strengthening on the whole.

Oils: 

Summary: U.S. soybean futures closed higher last Friday on concerns over soybean production outlook in South America under dry weather conditions and on tightening U.S. soybean supplies on brisk demand in exports and domestic crush. Oils futures broadly decline on Dalian Commodity Exchange today on profit taking. In the spot markets, soybean oil goes down 60-100 CNY/tonne and palm oil down 70-110 CNY/tonne, both in tepid trade.

Dalian oils futures have been technically overbought in the wake of consecutively sharp rises, and Malaysian Nov 1-20 palm oil exports are down 16% month on month to 908,443 tonnes, in addition to a rebound in meals prices, so short-term oils prices decline to adjust. But soybean crush margins are at a loss on Dalian due to continuously higher import cost. And domestic soybean crush fell 4% to 2.03 mln tonnes due to swelling meal inventories, so soybean oil stockpiles also decline slightly by 0.3% to 1.176 mln tonnes. Meanwhile, domestic palm oil and rapeseed oil inventories are also at low levels. Hence, fundamentals remain bullish in the oils market. Overall, the market is predicted to have upward impetus after this round of declines and adjustments, and buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,180-8,200 CNY/tonne in domestic coastal areas, a decline of 60-90 CNY/tonne. (Tianjin traders 8180; Rizhao traders 8190; Zhangjiagang traders 8190; and Guangzhou traders 8180-8200). 

Palm oil: RBD palm olein is mainly priced at 6,750-6,900 CNY/tonne in coastal areas, mostly down 70-110 CNY/tonne. (Tianjin traders 6840, down 110; Rizhao 6900, down 90; Zhangjiagang traders 6810, down 70; Guangzhou traders 6750, down 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures settled higher last Friday, but rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today on profit taking. Spot rapeseed oil prices go down 50-60 CNY to 10,230-10,360 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush remains above 2 mln tonnes for weeks due to huge soybean imports and adequate supplies, and the consumption of rapeseed oil is also affected by its huge price spread with soybean oil and palm oil; hence, rapeseed oil prices follow futures to decline and adjust. But domestic rapeseed oil stocks fell 7% to 199,000 tonnes last week, soybean oil stockpiles also fell slightly to 1.17 mln tonnes, and palm oil inventory is also low. Meanwhile, there is no pressure in oils supplies due to a rise in demand from feed this year. Overall, rapeseed oil market will have limited downside space and will stay at the high level.

Cottonseed oil: Cottonseed oil prices fluctuate by 50-200 CNY/tonne in some regions today. The prolonged dryness in parts of South America raises concerns over soybean production. Meanwhile, U.S. soybean supply is tightening due to strong export and brisk demand from China. US soybean futures closed higher on last Friday. But oil futures markedly fall back today on China’s Dalian Commodity Exchange on profit taking. In the cash market, soybean oil drops by 60-100 CNY/tonne and palm oil dips by 70-110 CNY/tonne. And bulk oils market will pare gains in the near term, which may drag down cottonseed oil market. Accordingly, oils market will remain bullish. In addition, 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 not drop too much and keep a strengthening trend on the whole.

Sunflower oil: Sunflower oil prices are mostly stable and some mixed in China today. Grade I imported sunflower oil is offered at 10,050-10,600 CNY/tonne, partially fluctuating by 50-400 CNY/tonne; crude sunoil is offered at 9,700 CNY/tonne.

China’s soybean oil stockpiles decline slightly by 0.3% weekly to 1.176 mln tonnes. And domestic palm oil and rapeseed oil inventories are also at low levels. Hence, fundamentals remain bullish in the oils market. Moreover, global vegetable oils are in tight supplies. And sunflower oil prices stay at high levels in foreign markets, and sunflowerseed prices are rising due to a production reduction. Therefore, domestic millers are propping up sunflower oil prices, which is positive to the market. But Dalian oils futures are broadly lower today, and spot soybean oil and palm oil prices also decline, which is adding bearish sentiment to sunflower oil market. Overall, sunflower oil market is expected to continue an strengthening trend.

Corn oil: Corn oil prices steady and strengthen with some fluctuations in China today. Grade I corn oil is offered at 10,000-10,500 CNY/tonne. (Shandong 10,200-10,500 CNY/tonne, down 100 CNY/tonne; Hebei 10,200; Liaoning 10,000; Sichuan 10,100); crude corn oil is offered at 8,500-8,600 CNY/tonne. (Hebei 8,350-8,600 CNY/tonne; Henan 8,500; Inner Mongolia 8,300).

Chinese millers still have sentiment in propping up prices as the cost remains high and there is a rise in corn germ prices, which is positive to the market. But spot corn oil stays at high prices. And its supplies are increasing due to a pickup in operation rates, whilst downstream buyers have little appetite under dismal demand. These are pressuring the market. Overall, corn oil market is predicted to keep firm in the short run.

(USD $1=CNY ¥6.57)