Today (Dec 1), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered lower by 70 CNY at 4,780-4,900 CNY/tonne and Uruguayan soybeans lower by 120 CNY at 4,780-4,900 CNY/tonne at Shandong port today. Domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans, and market sources said that port commodity inspections are looser now so that imported soybean supply will likely get increasing. Moreover, 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. Overall, short-term imported soybean market is predicted to steady with a weakening trend.

Cottonseed: Cottonseed prices in part fluctuate by 0.02-0.08 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 sharply fell on Monday on profit taking, as beneficial rain for soybean crops in parts of Brazil and Argentina eased drought concerns. Oils futures broadly decline on China’s Dalian Commodity Exchange in early trade, and then gradually narrow down losses to stay around the previous close. In the spot markets, soybean oil mostly go down 10-80 CNY/tonne, with a partial rise of 50 CNY/tonne, and palm oil mostly go up 10-30 CNY/tonne. The oils market is in tepid trade as buyers remain cautious about the volatile futures trend.

Malaysian palm oil futures fell over 2% for a time in the previous session, as Malaysia said it made no decision on extending an export tax exemption on crude palm oil next year and data from a shipping agency indicated a 17% decline in November exports. This is also a drag on Dalian oils futures today, but spot markets do not overreact to it under strong fundamentals. China’s soybean oil stocks fell 2% to 1.15 mln tonnes last week, as soybean crush fell 9.5% weekly to 1.84 mln tonnes due to swelling meal inventories, and palm oil and rapeseed oil stockpiles are also low. Meanwhile, domestic buyers will start to stock up oils for the Spring Festival, so that oil mills are supporting prices. Therefore, the oils market will have small downside space this round and will keep an uptrend in fluctuation.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,080-8,180 CNY/tonne in domestic coastal areas, a decline of 10-80 CNY/tonne and a partial rise of 10-50 CNY. (Tianjin traders 8100-8120; Rizhao traders 8150; Zhangjiagang traders 8180; and Guangzhou traders 8080-8100). 

Palm oil: RBD palm olein is mainly priced at 6,710-6,780 CNY/tonne in coastal areas, mostly up 10-30 CNY/tonne. (Tianjin traders 6760-6780, up 10; Rizhao not available; Zhangjiagang traders 6730, up 20; Guangzhou traders 6710-6720, up 30; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on improving weather in South America and on profit taking. Rapeseed oil futures stay above the previous closed in spite of losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 30-40 CNY to 10,080-10,150 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed crush remains low amid a stalemate with Canada, and its rapeseed oil stocks are only 180,000 tonnes at present. And its soybean oil and palm oil inventories are also low, so there is no pressure in supply. Besides, there still exists an inflation expectation. These are supporting rapeseed oil market. However, China’s soybean stocks will remain huge, as some 141 vessels or 9.26 mln tonnes of soybeans are expected to arrive at ports in December. And the consumption of rapeseed oil is cut by its excessive price spread with soybean oil and palm oil. Overall, rapeseed oil price is predicted to keep strengthening at the high level, but there will be mainly rigid demand in the market.

Cottonseed oil: Cottonseed oil prices decrease by 50 CNY/tonne CNY/tonne in several regions today. Favorable rainfall across soybean area in Argentina and regional South Brazil eased concerns over prolonged dryness, triggering profit taking in market. U.S. soybean futures slumped on the news. Oil futures wildly fell back on China’s Commodity Exchange in morning session, and spot soybean oil mostly dived 10-80 CNY/tonne. Malaysian palm oil dropped more than 2% overnight. Accordingly, cottonseed oil market may also be dragged down based on wild swings in bulk oils market in the near term. 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 stocking up packing-oil ahead of the Spring Festival. Therefore, oils fundamentals will remain bullish. In addition, cottonseed crushing mills keep facing losses as cottonseed is still pricey, so they intend to prop up prices as well. It is predicted that cottonseed oil price will not drop too much and stay strong in after-market.

Sunflower oil: Sunflower oil prices steady in China today. Grade I imported sunflower oil is offered at 10,250-10,650 CNY/tonne; crude sunoil is offered at 9,700-10,000 CNY/tonne.

China’s soybean oil stocks declined by 2% to 1.15 mln tonnes last week and palm oil and rapeseed oil inventories are also low, whilst the peak consumption of oils is approaching, so millers have strong sentiment propping up prices. 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. But sunflower oil prices remain high compared to this time in previous years, so that downstream buyers are still awaiting. Overall, sunflower oil market in China is expected to continue an strengthening trend.

Corn oil: Corn oil prices are stable with a partial rise in China today. Grade I corn oil is offered at 10,100-10,500 CNY/tonne. (Shandong 10,200-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,100; Sichuan 10,200); crude corn oil is offered at 8,600-8,800 CNY/tonne, up 150-200 CNY/tonne. (Hebei 8600-8800 CNY/tonne, up 150-200 CNY; Henan 8,500; Inner Mongolia 8,500).

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. Besides, some millers have started to stock up in the run up to Spring Festival, so that the market is in decent trade. But corn oil prices are at an extremely high level and the market is at risk, which could be bearish to the market. Overall, corn oil market is predicted to keep firm in the short run.

(USD $1=CNY ¥6.60)