Today (Dec 3), 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 are mixed in several regions with a fluctuation of 0.02-0.06 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 short-term cottonseed price will fluctuate narrowly in a short term. 

Oils:

Summary: U.S. soybean futures further fell on Wednesday as the forecast for more rain bolstered the crop production outlook in South America. But oils futures swing to move higher and post wide gains on China’s Dalian Commodity Exchange today as investors buy dips. In the spot markets, soybean oil goes up 100-180 CNY/tonne and palm oil up 100-120 CNY/tonne. As buyers remain cautious due to volatile trade on Dalian, the markets are predicted to stay in tepid trade with some low-level purchases.

Crude oil prices rose over 1.6% on Wednesday on an upbeat prospect for a global economic recovery after the U.K. approved a COVID-19 vaccine, which also boosted the market sentiment. In addition, China’s soybean oil stocks keep decreasing as more mills have to suspend soybean crush due to growing meal inventories, and its palm oil and rapeseed oil stockpiles also remain 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, but it will also fluctuate frequently as Dalian oils futures are volatile under fund-driven trade.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,160-8,240 CNY/tonne in domestic coastal areas, a rise of 70-180 CNY/tonne. (Tianjin traders 8210-8240; Rizhao traders 8160; Zhangjiagang traders 8300; and Guangzhou traders 8240).

Palm oil: RBD palm olein is mainly priced at 6,680-6,780 CNY/tonne in coastal areas, mostly up 100-120 CNY/tonne. (Tianjin traders 6740-6750, up 100; Rizhao 6780, up 110; Zhangjiagang traders 6680, up 120; Guangzhou traders 6690-6700, up 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued losses on Wednesday on profit taking as rains bolstered the crop outlook in South America. Rapeseed oil futures recoup their early losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 30-60 CNY to 9,980-10,180 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed crush remains low as tensions between Beijing and Ottawa sustains, and its rapeseed oil stocks keep tightening with a total of only 180,000 tonnes. In addition, China’s soybean oil and palm oil inventories are also low, so there is no pressure in supply. And there still exists an inflation expectation. These are supporting rapeseed oil market. But soybean arrivals at ports remain huge in China, so that its supply is also adequate. Moreover, the consumption of rapeseed oil is smaller under its big price spread with soybean oil and palm oil. Overall, rapeseed oil market is predicted to stay at the high level, but the trade will mainly come from rigid demand.

Cottonseed oil: Cottonseed oil prices further decrease by 100 CNY/tonne in several regions today. U.S. soybean futures further fell on Wednesday on profit taking as rainfall in South America boosted soybean production outlook. Downstream enterprises are wary of taking orders due to weak demand in market, which may drag down cottonseed oil prices. However, crude oil rose 1.6% overnight driven by optimistic outlook in global economic recovery, easing market sentiment as well. Oil futures fluctuate and wildly go up on China’s Commodity Exchange today. In the cash market, soybean oil up by 100-180 CNY/tonne and palm oil up by 100-120 CNY/tonne. Soybean oil stocks keep dropping. Also, the inventory of palm oil and rapeseed oil remains low. Besides, the peak season for stocking up packing-oil ahead of the Spring Festival is approaching. Therefore, the overall oils market will maintain an upward trend. 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 and some mixed in China today. Grade I imported sunflower oil is offered at 10,100-10,800 CNY/tonne; crude sunoil is offered at 9,700-9,950 CNY/tonne.

U.S. soybean futures further fell on Wednesday as the forecast for more rain bolstered the crop production outlook in South America. But oils futures swing to move higher and post wide gains on China’s Dalian Commodity Exchange today as investors buy dips. And spot soybean oil and palm oil prices also climb in China today. 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 with a partial decline 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 10,000, down 100 CNY/tonne; Sichuan 10,200); crude corn oil is offered at 8,600-8,800 CNY/tonne. (Hebei 8600-8800 CNY/tonne; Henan 8,500; Inner Mongolia 8,500).

The market is at risk due to extremely high corn oil prices, and there is a decline in corn germ prices, which are likely to add bearish sentiment to the market. However, domestic millers have stronger sentiment in propping up corn oil prices as corn germ prices stay at a high level at present. Moreover, the demand for oils in feed production this year also see a huge rise, which is also driving corn oil market. Overall, corn oil market is predicted to keep firm in the short run.

(USD $1=CNY ¥6.56)