Today (Nov 27), 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 China’s appetite for new Brazilian soybeans remains due to healthy crush margins for forward contracts, which will increase the supply and thus be negative to imported soybean market domestically. However, imported soybeans are in small supplies, in addition to strict commodity inspections at ports, which is supporting the market. In a hyrbid of the bull and the bear, short-term imported soybean market is predicted to steady.

Cottonseed: Cottonseed prices further rise by 0.04CNY/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: CBOT was closed on the Thanksgiving Day Thursday. And oils futures fluctuate to adjust on China’s Dalian Commodity Exchange today, as domestic crushers will keep high soybean crush when December is expected to see 141 vessels or 9.26 mln tonnes of soybeans arriving at ports. In the spot markets, soybean oil goes down 20-90 CNY/tonne and palm oil up 10 CNY/tonne, both in tepid trade.

Malaysian palm oil exports quickly plummet in November, but India has decided to slash import tax on crude palm oil (CPO) to 27.5% from 37.5%. This announcement immediately promotes the trade of tens of thousands of tonnes of CPO for December shipment, and pushes local offers to rise by 15 USD in producing countries. In addition, import margins for soybean oil and palm oil have been notably worsening, and Chinese buyers are said to have been canceling soybean cargoes. Meanwhile, China’s commercial soybean oil stocks have declined for a sixth straight week, and palm oil and rapeseed oil inventories are also low, whilst the peak consumption of oils is approaching. Besides, there exists a global inflation expectation. Overall, the oils market is predicted to have limited downside space and maintain an uptrend in fluctuation.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,050-8,150 CNY/tonne in domestic coastal areas, a decline of 20-90 CNY/tonne. (Tianjin traders 8060; Rizhao traders 8150; Zhangjiagang traders 8140; and Guangzhou traders 8050). 

Palm oil: RBD palm olein is mainly priced at 6,770-6,840 CNY/tonne in coastal areas, mostly up 10 CNY/tonne. (Tianjin traders 6840, up 10; Rizhao not available; Zhangjiagang traders 6790, up 10; Guangzhou traders 6770, up 10; and Xiamen not available).

Rapeseed oil: CBOT was closed on the Thanksgiving Day Thursday, and rapeseed oil futures open low and expand losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 80-140 CNY to 10,050-10,140 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush maintains at a high level owing to ample feedstock supply, and the consumption of rapeseed oil is cut by its excessive price spread with soybean oil and palm oil; therefore, rapeseed oil market is dragged to slide. But China’s rapeseed crush has been low amid a stalemate with Canada, and rapeseed oil stocks only total 199,000 tonnes. Meanwhile, domestic soybean oil and palm oil inventories are also at low levels, while the peak consumption of oils is approaching. In addition, foreign markets perform well following promising news about COVID-19 vaccines, and there exists a global inflation expectation. Overall, rapeseed oil market is predicted to have small downside space and to stay at the high level.

Cottonseed oil: Cottonseed oil prices keep steady and fluctuate by 50-100 CNY/tonne in some regions today. CBOT was closed on Thanksgiving Day. There are 141 cargoes totaling 9.26 mln tonnes of soybeans being projected to arrive at ports in December, so the operation rate in crushing mills will be high. Oil futures fluctuate on China’s Dalian Commodity Exchange today, with soybean oil falling by 20-90 CNY/tonne in the spot market. Besides, Malaysia’s palm oil exports for November steeply decline. Accordingly, bulk oils market falls back in the near term, which may weighed on cottonseed oil market. However, expected tight oils supply and the strength on crude oil offset worries about lower demand. With the forthcoming peak season for consumption, oils fundamentals will remain bullish against the backdrop of global inflation expectations. 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 stay strong on the whole.

Sunflower oil: Sunflower oil prices steady in China today. Grade I imported sunflower oil is offered at 10,200-10,650 CNY/tonne; crude sunoil is offered at 9,700-10,000 CNY/tonne.

Import margins for soybean oil and palm oil have been notably worsening, and Chinese buyers are said to have been canceling soybean cargoes. Meanwhile, China’s commercial soybean oil stocks have declined for a sixth straight week, and palm oil and rapeseed oil inventories are also low, whilst the peak consumption of oils is approaching. In addition, there exists a global inflation expectation. Hence, fundamentals remain bullish in the oils market. Moreover, sunflower oil prices are at high levels in foreign countries, and a reduction in sunflowerseed production is also lifting prices. Therefore, domestic millers have strong sentiment in propping up sunflower oil prices. Overall, sunflower oil market in China is expected to continue an strengthening trend.

Corn oil: Corn oil prices steady in China today. Grade I corn oil is offered at 10,000-10,500 CNY/tonne. (Shandong 10,200-10,500 CNY/tonne; Hebei 10,200; Liaoning 10,000; Sichuan 10,200); 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 have stronger sentiment in propping up corn oil prices as corn germ prices stay at a high level in the market at present. Moreover, the demand for oils in feed production this year also see a huge rise, which is also driving corn oil 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 ¥6.58)