Today (Dec 7), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered lower by 100 CNY at 4,560-4,800 CNY/tonne at Shandong ports 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, soybean arrivals at domestic ports remain huge, and importers bought 15-20 vessels of U.S. and Brazilian soybeans last week, 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 rise by 0.01-0.02 CNY/kg in several regions 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 fell last Friday as further rains eased crop pressure in Brazil and analysts raised estimates for 2020/21 Brazilian soybean production to a record level of 131.79 mln tonnes. But oils futures continue strong performance to post gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 10-50 CNY/tonne. And the trade is tepid as buyers remain cautious about volatile futures market.

As the Indonesian government last Thursday announced to hike its crude palm oil export levy from December 10, and palm oil supply is expected to get tightening in November and December, well-known analysts become bullish about the market outlook in the first half of 2021 and hold that the market will decline only from the second half of next year. Palm oil futures thus rose 3% on the BMD last Friday to hit the highest level in over eight years. Meanwhile, soybean crush in China fell 3% to 1.79 mln tonnes last week due to swelling meal inventories, so that soybean oil stocks also continued reducing. And rapeseed oil stockpiles in China also stay low. Besides, domestic buyers will soon start stocking up oils for the Chinese Lunar New Year. Therefore, the oils market will keep an uptrend in fluctuation overall. But U.S. soybean futures fluctuate frequently under the impact of weather conditions recently, and Dalian soybean oil futures also have a seesaw ahead of the 8,000 key level, so participants need to remain cautious.

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 6,790-6,860 CNY/tonne in coastal areas, mostly up 10-20 CNY/tonne. (Tianjin traders 6850-6860, up 10; Rizhao 6860, flat; Zhangjiagang traders 6790, up 10; Guangzhou traders 6810-6820, up 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell last Friday on further rains in Brazil, and rapeseed oil futures fluctuate to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 30 CNY to 9,940-10,170 CNY/tonne in coastal regions in tepid trading.

Market sentiment gets cautious in the wake of the news that HUAWEI Meng Wanzhou may get released. Besides, China’s soybean supply remains adequate due to huge arrivals at ports, and 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, rapeseed oil stocks fell 1% to 178,000 tonnes in China last week, and soybean oil inventories have also accelerated declines and palm oil stockpiles are also low. Meanwhile, the peak consumption of oils is approaching in China. Besides, Canada Statistics have sharply lowered down rapeseed production to 18.72 mln tonnes, 673,000 tonnes lower than the forecast in October. Overall, rapeseed oil market will have limited downside space and will maintain at the high level.

Cottonseed oil: Cottonseed oil prices increase by 50-100 CNY/tonne in several regions today. Indonesia announced last Thursday to hike export levy on crude palm oil from Dec 10. Palm oil on Bursa Malaysia Derivatives rose 3% last Friday on the news, hitting a fresh peak over the past more than eight years. Moreover, oils in China’s market still keep strengthening. Both soybean oil and palm oil settle higher on Dalian Commodity Exchange today with an advance of 10-50 CNY/tonne in the cash market. Besides, soybean crush fell by 3% to 1.79 mln tonnes last week due to bloated soybean meal stocks. Also, soybean oil inventory continues dropping while palm oil inventory also remains low. And the peak season for stocking up packing-oil ahead of the Spring Festival is about to begin. 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. It is predicted that cottonseed oil price will still stay strong in after-market.

Sunflower oil: Sunflower oil prices steady 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.

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. But oils futures continue strong performance to post gains on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil prices are both climbing. Besides, 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. Overall, sunflower oil market in China is predicted to keep range-bound in the short run.

Corn oil: Corn oil prices are stable with a weakening trend in China today. Grade I corn oil is offered at 10,200-10,300 CNY/tonne. (Shandong 10,200-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,200, up 200 CNY; Sichuan 10,200); crude corn oil is offered at 8,300-8,700 CNY/tonne, down 50-100 CNY/tonne. (Hebei 8,550-8,600 CNY/tonne; Henan 8,500; Inner Mongolia 8,700).

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

(USD $1=CNY ¥6.54)