Today (Nov 28), 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 in part fluctuate by 0.01-0.1 CNY/kg 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 rose last Friday as continued dryness was threatening soybean crop prospect in South America. Oil futures are notably higher in early trade on China’s Dalian Commodity Exchange today, but later palm olein futures fluctuate to decline as Malaysian November palm oil exports drop 16% month over month, and soybean oil futures are also narrowing down gains. In the spot markets, soybean oil goes up 50-80 CNY/tonne and palm oil down 100 CNY/tonne, but the former may decline in the wake of losses on Dalian.

As Dalian oils futures have risen to such a high point, traders could easily take profits on any fresh cue; hence, oils market will fluctuate frequently in the short run. But soybean meal shipments are sluggish and more mills have been in downtime due to swelling inventories, so that soybean crush fell 9.5% weekly to 1.84 mln tonnes last week and soybean oil stocks also declined 2% to 1.15 mln tonnes. Meanwhile, domestic palm oil and rapeseed oil stockpiles are also low, whilst the peak consumption of oils is approaching. Besides, India has slashed import tax on crude palm oil to 27.5% from 37.5%, and U.S. soybean futures remain strong, in addition to a global inflation expectation. Overall, the oils market is predicted to have small downside space and remain an uptrend in fluctuation.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,110-8,200 CNY/tonne in domestic coastal areas, a rise of 50-90 CNY/tonne. (Tianjin traders 8110-8140; Rizhao traders 8200; Zhangjiagang traders 8160; and Guangzhou traders 8110-8130).

Palm oil: RBD palm olein is mainly priced at 6,740-6,830 CNY/tonne in coastal areas, mostly down 90-100 CNY/tonne. (Tianjin traders 6780, down 100; Rizhao 6830, down 100; Zhangjiagang traders 6760, down 90; Guangzhou traders 6740, down 90; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed with gains last Friday, but rapeseed oil futures modestly fall on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 10-30 CNY to 10,050-10,110 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush is expected to stay high under adequate feedstock supply as soybean arrivals at domestic ports are forecast to reach 9.26 mln tonnes in December. 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 declined by 9.3% to 180,000 tonnes last week. Meanwhile, domestic soybean oil stockpiles also fell 2% to 1.15 mln tonnes and palm oil inventory is also low, while the peak consumption of oils is approaching. Overall, rapeseed oil market is predicted to have limited downside space and to stay at the high level.

Cottonseed oil: Cottonseed oil prices fluctuate by 100 CNY/tonne in some regions today. Malaysia’s palm oil exports in November become poor, falling by more than 16% compared to the previous month. Investors are likely to take profit as oils rise to the current highs. Wild swings in bulk oils market in the near term may weigh on cottonseed oil market. However, soybean oil stocks have declined by 2% to 1.15 mln tonnes. Also, the inventory of palm oil and rapeseed oil remains low. Besides, oil plants tend to raise price with the forthcoming peak season for consumption. Moreover, U.S. soybean futures keep strengthening. Therefore, 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 with partial rise 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.

China’s soybean crush fell drastically by 9.5% to 1.84 mln tonnes last week, so that soybean oil stocks also declined by 2% to 1.15 mln tonnes. And domestic palm oil and rapeseed oil inventories are also low. Meanwhile, domestic 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 fluctuate to go strengthening in China today. Grade I corn oil is offered at 10,000-10,500 CNY/tonne, fluctuating by 50-100 CNY/tonne. (Shandong 10,200-10,300 CNY/tonne, fluctuating by 50-100 CNY; Hebei 10,200; Liaoning 10,100, up 100 CNY; Sichuan 10,200); crude corn oil is offered at 8,500-8,650 CNY/tonne. (Hebei 8,500-8,650 CNY/tonne, up 50 CNY; 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)