Today (Dec 28), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered at 5,000 CNY/tonne at Shandong ports today, a rise of 50 CNY/tonne from last Friday. Some traders are unwilling to sell under tight supply at port now, and the cost import remains high due to a strong trend in U.S. soybean prices, which together bolster imported soybean prices at port to keep strengthening. However, commodity inspections are relax at ports now, and imports of U.S. soybeans are huge, so it is very likely that imported soybean supply will get increasing in China. In the short term, imported soybean market may keep strengthening on bullish factors.

Cottonseed: Cottonseed prices in part increase by 0.02-0.08 CNY/kg in China 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 in Shandong have suspended operation due to environmental protection. Hence, they have strong intention to force price down. But cottonseed output this year is lower than the previous year and cottonseed oil prices stay firm, which supports cottonseed market. It is expected that short-term cottonseed price will fluctuate to stay strong.

Oils: 

Summary: U.S. soybean market was closed for Christmas last Friday, but oils futures drop on China’s Dalian Commodity Exchange on profit-taking today. In the spot markets, soybean oil and palm oil go down 50-160 CNY/tonne, both in lukewarm trade.

As some oil mills stayed in downtime subject to the environmental protection in Shandong and some suspended or limited production under swelling meal inventory in Guangdong and Guangxi, operation rates for soybeans declined as expected last week by 6% to 1.88 mln tonnes and soybean oil stocks also fell further to around 1 mln tonnes, leading to a tightening supply picture in south China. Besides, domestic rapeseed oil stockpiles are also low, and the market expects that Malaysian palm oil inventories will extend a downtrend. With strong support on the downside, short-term oils market is predicted to have little decline space and to keep a strengthening trend. Argentina's government has urged the labor and capital parties to meet on Tuesday to address strikes. If strike resolved, U.S. soybean futures could post losses and will thus drag down oils market, so participants can keep an eye on that.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,600-8,810 CNY/tonne in domestic coastal areas, a decline of 50-130 CNY/tonne. (Tianjin traders 8610; Rizhao traders 8600; Zhangjiagang traders 8760-8810; and Guangzhou traders 8810). 

Palm oil: RBD palm olein is mainly priced at 7,240-7,310 CNY/tonne in coastal areas, mostly down 110-160 CNY/tonne. (Tianjin traders 7310, down 150; Rizhao 7260, down 110; Zhangjiagang traders 7240, down 160; Guangzhou traders 7240-7260, down 150; and Xiamen not available).

Rapeseed oil: U.S. soybean market was closed last Friday, and rapeseed oil futures modestly fall on China’s Zhengzhou Commodity Exchange today, but gains are smaller. Spot rapeseed oil prices settle down 90 CNY at 10,110-10,260 CNY/tonne in coastal regions in tepid trading.

Soybean arrivals at domestic ports are huge and its supply is thus adequate. And the consumption of rapeseed oil is smaller under its huge price spread with soybean oil and palm oil. These are dragging down rapeseed oil market. But as rapeseed crush remains low, domestic rapeseed oil stocks dropped by 12.1% to 142,000 tonnes last week. Besides, domestic soybean oil stocks also keep falling. Hence, there is no pressure in oils supplies. Overall, rapeseed oil market is predicted to have limited downside space and to keep at the high level.

Cottonseed oil: Cottonseed oil prices partly fluctuate by 100 CNY/tonne in China today. CBOT was closed on Christmas Day. Oils futures pare gains on profit taking on China’s Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil fall by 50-160 CNY/tonne. Cottonseed oil price is weighed down by weak demand in its market. Besides, soybean oil stocks keep falling as some soyoil factories in Shandong are idled by environmental protection and some plants in Guangdong and Guangxi also shut down due to swelling soybean meal inventory. Also, rapeseed oil stockpiles are at low levels. Hence, the overall oils market will maintain an uptrend dominated by supportive factors above. Moreover, cottonseed oil millers are facing sustained loss, so that they have certain sentiment in lifting prices. Therefore, it is predicted that short-term cottonseed oil market will not drop too much and go strengthening on the whole.

Sunflower oil: Sunflower oil prices maintain stable and some fluctuate to adjust in China today. Grade I imported sunflower oil is offered at 10,150-10,800 CNY/tonne; crude sunoil is offered at 9,700-9,900 CNY/tonne, partially fluctuating by 50-100 CNY/tonne from last Friday.

Domestic soybean oil stocks fell further to around 1 mln tonnes last week as soybean crush dropped 6% to 1.88 mln tonnes, leading to tightening supplies in southern market. In addition, domestic rapeseed oil stocks are also low, and the market expects that Malaysian palm oil inventories will also extend the downtrend. Meanwhile, sunflower oil is in tight supply as a reduction in sunflowerseed production causes a supply woe. Sunflower oil millers have strong sentiment in supporting oil prices, which is positive to the market. However, oils futures decline on China’s Dalian Commodity Exchange on profit-taking today, and spot soybean oil and palm oil also go down 50-160 CNY/tonne, which is negative to sunflower oil market. Overall, sunflower oil market in China is predicted to fluctuate and marginally climb in the short run.

Corn oil: Corn oil prices are stable with a partial rise in China today. Grade I corn oil is offered at 10,000-10,300 CNY/tonne. (Shandong 10,200-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,000; Sichuan not available); crude corn oil is offered at 8,450-8,700 CNY/tonne. (Hebei 8,450-8,600 CNY/tonne; Henan 8,500; Inner Mongolia 8,700).

Some oil mills in Shandong Province are still in downtime subject to the environmental protection, and buyers have started stocking up packaging oils for the holidays, so millers still have sentiment to raise prices. However, spot corn oil prices remain high at present, and most millers tend to wait on the sidelines, which is adding bearish sentiment to the market. Overall, corn oil market is predicted to keep strengthening.

(USD $1=CNY ¥6.52)