Today (Dec 30), 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 0.01-0.04 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: U.S. soybean futures climbed near to 1,300 cents on Tuesday on strong exports and unfavorable weather conditions in South America. Oils futures recoup sharp gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 50-140 CNY/tonne and palm oil up 140-160 CNY/tonne, both in thin trade.

December production and exports bode well for a continued decline in Malaysian palm oil inventories, so palm olein is somewhat in stronger performance than soybean oil on Dalian today. China’s soybean crush fell 6% to 1.88 mln tonnes last week due to limiting production under the environmental protection and swelling meal stocks. Soybean oil stockpiles are thus expected to go below 1 mln tonnes in the near term, and spot supplies are tightening in southern China. And domestic rapeseed oil stockpiles are also low. With firm downside support, the oils market is predicted to stay high with a strengthening trend. But the oils market has been in thin trade since prices rose to high levels in December and Argentine CIARA and worker unions have hammered out a deal to end the strike, which may add to fluctuations in the market. Participants need to keep good balance of buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,600-8,850 CNY/tonne in domestic coastal areas, a rise of 50-140 CNY/tonne. (Tianjin traders 8650; Rizhao traders 8600; Zhangjiagang traders not available; and Guangzhou traders 8850). 

Palm oil: RBD palm olein is mainly priced at 7,290-7,390 CNY/tonne in coastal areas, mostly up 140-160 CNY/tonne. (Tianjin traders 7390, up 140; Rizhao not available; Zhangjiagang traders 7290, up 140; Guangzhou traders 7310, up 160; and Xiamen not available).

Rapeseed oil: The weekend precipitation fell below the market expectation in South America and Argentine soybean crops were in slow planting and poor condition, so the market was concerned about yield loss in South America; and strong U.S. soybean export could further tighten the supply, which together bolstered U.S. soybean futures to post sharp gains. Hence, U.S. soybean futures soared on Tuesday. Rapeseed oil futures modestly advance on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 80-130 CNY at 10,160-10,240 CNY/tonne in coastal regions in tepid trading. 

China’s rapeseed oil stockpiles have fallen to 142,000 tonnes under low rapeseed crush, and soybean oil stocks have also further declined to around 1 mln tonnes. In Dec 1-25, Malaysian palm oil production dropped 15% month on month, while exports greatly increased by 17.3%. Hence, there is no pressure in oils supply, and this is supporting rapeseed oil market. But 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. Overall, rapeseed oil market is predicted to stay at the high level under the dominance of bullish factors. Participants can keep an eye on the influence brought by the end of strikes in Argentina.

Cottonseed oil: Cottonseed oil prices keep steady with a partial increase of 20-50 CNY/tonne in China today. U.S. soybean futures skyrocketed to nearly 1,300 cents in overnight trading on strong export and drier conditions in South America. Oils futures post substantial rises on China’s Dalian Commodity Exchange today. In the spot market, soybean oil jumps 50-140 CNY/tonne and palm oil surges 140-160 CNY/tonne.

Malaysia’s periodic palm oil production in December and better export data are positive for stocks clearing. Consequently, palm oil is somewhat stronger than soybean oil. 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. Soybean crush has declined by 6% to 1.88 mln tonnes, and undoubtedly soybean oil stocks will fall to below 1 mln tonnes. In this case, the supply of spot soyoil in South China is tightening. 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 maintain the high level 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, a partial decline of 100 CNY/tonne from yesterday.

Downstream buyers are cautious in sunflower oil market due to high prices and tend to buy on immediate demand, so the market has been in lukewarm trade. And some buyers also choose corn oil as a substitute, so some sunflower oil millers have weaker sentiment in supporting prices, which is also bearish to the market. However, U.S. soybean futures climbed near to 1,300 cents on Tuesday on strong exports and unfavorable weather conditions in South America. Oils futures recoup sharp gains on China’s Dalian Commodity Exchange today, and soybean oil and palm oil also both climb, which is bullish to sunflower oil market. On the whole, sunflower oil prices will likely fluctuate in the near term.

Corn oil: Corn oil prices are stable 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 ¥6.53)