Today (Dec 29), 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. 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 increase by 0.02 CNY/kg in several regions of China today. Cottonseed output this year is lower than the previous year and cottonseed oil prices stay firm, which supports cottonseed market. But 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. Additionally, the overall cottonseed market is in subdued trade, which may curb its price rises. It is expected that short-term cottonseed price will fluctuate to stay strong.

Oils: 

Summary: The CIARA-CEC chamber of soy byproduct manufacturers will meet with the worker unions on Tuesday, and the former has offered a wage raise to the latter to try to resolve strikes. Weighed by progress in negotiation over Argentine oilseed workers' strike and also due to dismal export inspection data, U.S. soybean futures fell on Monday. Oils futures continue dropping but have notably narrowed down losses on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil partially go down 10-20 CNY/tonne, both in tepid trade.

Dalian oils futures are in the correction territory, as the absence of bullish news raises the sentiment for profit taking ahead of the New Year holidays and toward the Lunar New Year. However, 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 also remain low. Meanwhile, Malaysian palm oil production fell 15% month on month in Dec 1-25, while its exports surged 17.3%. With strong downside support, short-term oils market is predicted to have small decline space and to maintain a strengthening pattern overall.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,540-8,740 CNY/tonne in domestic coastal areas, partially down 10-20 CNY/tonne. (Tianjin traders 8540-8560; Rizhao traders 8550; Zhangjiagang traders not available; and Guangzhou traders 8740). 

Palm oil: RBD palm olein is mainly priced at 7,160-7,290 CNY/tonne in coastal areas, mostly down 10-20 CNY/tonne. (Tianjin traders 7270-7290, down 10; Rizhao not available; Zhangjiagang traders 7160, down 20; Guangzhou traders 7160-7180, down 20; and Xiamen not available).

Rapeseed oil: U.S. soybean market closed lower on Monday on progress in negotiation over Argentine oilseed workers' strike and dismal U.S. export inspection data. Rapeseed oil futures modestly decline on China’s Zhengzhou Commodity Exchange today, but gains are smaller. Spot rapeseed oil prices settle down 20-30 CNY at 10,100-10,150 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 have fallen to 142,000 tonnes. Besides, domestic soybean oil stocks have also decreased to around 1.0 mln tonnes. And the market expects that Malaysian palm oil stockpiles will extend a downtrend. 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 keep steady with a partial decrease by 50 CNY/tonne in China today. Chicago soybean futures ended down on progress in Argentine labor talks and lower export inspections. Oils futures further drop on China’s Dalian Commodity Exchange today but its declines have obviously narrowed. In the spot market, soybean oil and palm oil partly fall by 10-20 CNY/tonne. Cottonseed oil price slips slightly due to 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 with a partial decline in China today. Grade I imported sunflower oil is offered at 10,100-10,800 CNY/tonne; crude sunoil is offered at 9,700-9,900 CNY/tonne, down 50 CNY/tonne from yesterday.

The CIARA-CEC chamber of soy byproduct manufacturers will meet with the worker unions on Tuesday, and the former has offered a wage raise to the latter to try to resolve strikes. With progress in negotiation over Argentine oilseed workers' strike and also due to dismal export inspection data, U.S. soybean futures were weighed down to decline on Monday. Oils futures continue falling but have notably narrowed down losses on China’s Dalian Commodity Exchange today. Spot soybean oil and palm oil partially go down 10-20 CNY/tonne, which is negative to sunflower oil market. But 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. Overall, sunflower oil market in China is predicted to fluctuate in the short run.

Corn oil: Corn oil prices are stable with a partial decline 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 10,000); 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 ¥6.55)