Today (Dec 2), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered at 4,780-4,900 CNY/tonne and Uruguayan soybeans 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 keep steady 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 short-term cottonseed price will fluctuate narrowly in a short term.

Oils: 

Summary: U.S. soybean futures further fell on Monday, as South America was forecast to welcome more needed rains and in the absence of sales report to China. Oils futures fluctuate to adjust on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 20-50 CNY/tonne but palm oil down 50-70 CNY/tonne, both in tepid trade.

U.S. soybean futures decline from the key resistance of 1,200 cents, and domestic oils shipments have been at a slower pace and some investors have also been flowing out of the market, so that domestic oils market is trapped in wild fluctuations and see-saw. But soybean meal stock pressure keeps ballooning and drags soybean crush down by 9.5% weekly to 1.84 mln tonnes last week and possibly to 1.80 mln tonnes this week, so soybean oil stockpiles also fell 2% to 1.15 mln tonnes. And domestic palm oil and rapeseed oil inventories are also low. Meanwhile, domestic buyers are about to start stocking up oils ahead of the Chinese Lunar New Year. Therefore, the oils market is expected to maintain an uptrend in fluctuation. As the market will stay volatile in the short run, participants need to remain cautious.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,120-8,140 CNY/tonne in domestic coastal areas, a rise of 20-50 CNY/tonne. (Tianjin traders 8120; Rizhao traders 8120; Zhangjiagang traders 8140; and Guangzhou traders 8120-8140). 

Palm oil: RBD palm olein is mainly priced at 6,670-6,750 CNY/tonne in coastal areas, mostly down 50-70 CNY/tonne. (Tianjin traders 6740-6750, down 50; Rizhao not available; Zhangjiagang traders 6700, down 60; Guangzhou traders 6670, down 70; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Tuesday on forecast for improving weather in South America. Rapeseed oil futures follow to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 70-90 CNY to 9,990-10,080 CNY/tonne in coastal regions in tepid trading.

Soybean stockpiles in China remain huge due to large cargoes arriving at ports, and the consumption of rapeseed oil is smaller under its big price spread with soybean oil and palm oil; thus, short-term rapeseed oil prices fluctuate at high levels to adjust. But China’s rapeseed oil stocks are only 180,000 tonnes in coastal regions, soybean oil stockpiles have also fallen to 1.15 mln tonnes, and palm oil inventories are also low. Meanwhile, domestic buyers will gradually start stocking up oils as the festival season draws near. Besides, U.S. soybean futures trend is still strong and there still exists an inflation expectation. These will support rapeseed oil prices to maintain at the high level.

Cottonseed oil: Cottonseed oil prices decrease by 50-100 CNY/tonne CNY/tonne in several regions today. U.S. soybean futures further fell on Tuesday on expected more rainfall across crop area in South America and lack of purchase from China. And oil futures fluctuate on China’s Commodity Exchange today. US soybean falls back from 1,200 cents. Oils deliveries in China also have slowed. 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 remain cautious and tend to buy on immediate demand. Overall, sunflower oil market in China is expected to continue an strengthening trend.

Corn oil: Corn oil prices are stable 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; 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 ¥6.56)