Today (Dec 4), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered lower by 20 CNY at 4,760-4,900 CNY/tonne at Shandong port today. Domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans, and commodity inspections are looser at Shandong ports now so that imported soybean supply is increasing. Moreover, while still purchasing U.S. soybeans, 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 drop by 0.01-0.05 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 rose on Thursday on an uncertain crop outlook in South America and as U.S. dollar fell to an over two-year low. Oils futures continue moving higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 20-40 CNY/tonne, in tepid trade.

Indonesia has sharply hiked the export levy on crude palm oil to $180 per tonne from $55 and on RBD palm olein to $140 per tonne from $35, a move that indicates the country’s determination in implementing B30. But this will divert palm oil demand to Malaysia, so palm oil futures surged on BMD. In addition, China’s soybean oil stocks keep declining as more mills have suspended production due to swelling meal inventories, and its palm oil and rapeseed oil stockpiles are also low. Domestic buyers will soon start stocking up oils for the Spring Festival. Hence, the oils market will keep an uptrend in fluctuation on the whole. But Dalian oils futures market may go volatile on profits taking as soybean oil futures get near to 8,000, and this will also trigger frequent fluctuations in the spot market, so participants need to keep good balance in buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,250-8,370 CNY/tonne in domestic coastal areas, a rise of 30-40 CNY/tonne. (Tianjin traders 8250-8270; Rizhao traders 8280; Zhangjiagang traders 8370; and Guangzhou traders 8290). 

Palm oil: RBD palm olein is mainly priced at 6,720-6,820 CNY/tonne in coastal areas, mostly up 20-30 CNY/tonne. (Tianjin traders 6810, up 30; Rizhao 6820, flat; Zhangjiagang traders 6720, up 20; Guangzhou traders 6750-6770, up 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Thursday on an uncertain crop outlook in South America and as U.S. dollar fell to an over two-year low, in addition to the spillover effect following a strengthening trend in soybean oil futures. Rapeseed oil futures stay below the previous close in spite of gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 10-50 CNY to 9,970-10,170 CNY/tonne in coastal regions in tepid trading.

Market concerns arose after a media report said that prosecutors from U.S. Justice Department are discussing a deal with lawyers for Huawei finance chief Meng Wanzhou to resolve criminal charges against her. 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. These are weighing on rapeseed oil prices. However, China’s 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, whilst the peak consumption of oils is approaching. Overall, rapeseed oil market will have limited downside space and will maintain at the high level.

Cottonseed oil: Cottonseed oil prices fluctuate by 50 CNY/tonne in several regions today. U.S. soybean futures rose on Thursday as there were still uncertainties in soybean production outlook in South America and USD dropped to its lowest in more than two years. Oil futures continue moving higher on China’s Dalian Commodity Exchange today. In the cash market, soybean oil and palm oil up by 20-40 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 despite volatility. In addition, cottonseed crushing mills keep facing losses as cottonseed is still pricey, so they intend to prop up prices as well. Downstream enterprises are wary of taking orders due to weak demand in market, which may drag down cottonseed oil prices. It is predicted that cottonseed oil price will not drop too much and still 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 10,200-10,800 CNY/tonne; crude sunoil is offered at 9,700-9,950 CNY/tonne.

U.S. soybean futures rose on Thursday on an uncertain crop outlook in South America and as U.S. dollar fell to an over two-year low. Oils futures continue moving higher on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil prices both climb. In addition, there exists a global inflation expectation, and fundamentals remain bullish in the oils market. Moreover, sunflowerseed prices are high due to a reduction in production. Therefore, domestic millers have strong sentiment in propping up sunflower oil prices. But downstream buyers are cautious about high-priced sunflower oil market and tend to buy on immediate demand. Besides, there is a decline in forward imported sunflower oil prices. Overall, sunflower oil market in China is expected to have some downside potential.

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 10,000; Sichuan 10,200); crude corn oil is offered at 8,600-8,800 CNY/tonne, up 100 CNY/tonne. (Hebei 8,600-8,800 CNY/tonne; Henan 8,500; Inner Mongolia 8,700, up 200 CNY).

Domestic millers have stronger sentiment in propping up corn oil prices as corn germ prices stay at a high level at present, and domestic buyers will soon start stocking up oils for the festival season. These are supporting corn oil market. However, the market is at risk due to extremely high corn oil prices, which are likely to add bearish sentiment to the market. Overall, corn oil market is predicted to keep firm in the short run.

(USD $1=CNY ¥6.55)