Today (Dec 8), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered 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 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 further declined on Monday as increased rains in Brazil eased soybean crop pressure and AgRural estimated Brazilian soybean acreage for 2020/21 at 38.3 million hectares, up 3.6% year on year and output at an all-time high of 132.2 mln tonnes. Oils futures also fall on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 50-100 CNY/tonne and palm oil down 10-20 CNY/tonne, both in tepid trade.

MPOB and USDA will release their own report on Thursday. Hence, investors become cautious and funds are flowing out, which weighs on Dalian oils futures to decline notably today. However, China’s soybean oil stocks have dropped 6% to 1.08 mln tonnes, as soybean crush fell 2.9% to 1.79 mln tonnes under swelling meal inventories, and it is predicted that the stocks will decline further to less than 1 mln tonnes in the near future. In addition, palm oil and rapeseed oil inventories are also low, while domestic buyers will soon start stocking up packaging oils for the Spring Festival. So fundamentals are still bullish in the oils market. Overall, the oils market is predicted to see limited downside space this round and to maintain an uptrend in fluctuation. Buyers can wait for low and stable prices to make appropriate replenishment.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,190-8,330 CNY/tonne in domestic coastal areas, a decline of 50-100 CNY/tonne. (Tianjin traders 8190-8200; Rizhao traders 8270; Zhangjiagang traders 8330; and Guangzhou traders 8230). 

Palm oil: RBD palm olein is mainly priced at 6,780-6,870 CNY/tonne in coastal areas, mostly down 10-20 CNY/tonne. (Tianjin traders 6860-6870, down 20; Rizhao 6870, down 20; Zhangjiagang traders 6780-6800, down 20; Guangzhou traders 6820, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Monday, and rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go down 100-120 CNY to 9,820-9,990 CNY/tonne in coastal regions in tepid trading.

China’s soybean imports remain huge, and the consumption of rapeseed oil is smaller under its big price spread with soybean oil and palm oil, which are weighing on rapeseed oil prices. But rapeseed crush remain low in China now amid tensions between Beijing and Ottawa, and rapeseed oil stocks are only 178,000 tonnes. Besides, soybean oil stocks have been falling at a quicker pace, and palm oil inventories are also low, while the peak consumption season is drawing near. Hence, fundamentals are bullish in the market, in addition to a global inflation expectation. The overall rapeseed oil market is predicted to stay at the high level, but buyers can stay on the sidelines as short-term trend is in the correction territory.

Cottonseed oil: Cottonseed oil prices keep steady today. Soybean crush falls by 2.9% to 1.79 mln tonnes as soybean meal stocks keep swelling. In this case, soybean oil inventory further plunges 6% to 1.08 mln tonnes and will very likely drop to less than 1 mln tonnes in the future. Likewise, the inventory of palm oil and rapeseed oil maintains the low level all the time. Besides, the peak season for stocking up packing-oil ahead of the Spring Festival is about to begin. Therefore, oils fundamentals are bullish, and 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. However, U.S. soybean futures drop further. And oil futures also pare gains in intraday trading on Dalian Commodity Exchange. In the cash market, soybean oil down by 50-100 CNY/tonne, and palm oil down by 10-20 CNY/tonne. Plus, downstream enterprises are cautious in taking orders due to weak demand in market. Hence, cottonseed oil price will stabilize tentatively but still strengthen 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 9,700-9,900 CNY/tonne.

Downstream buyers are cautious about high-priced sunflower oil market and tend to buy on immediate demand. In addition, oils futures also fall on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil prices also fall, which is bearish to sunflower oil market. But China’s soybean oil stocks have dropped 6% to 1.08 mln tonnes will probably decline further to less than 1 mln tonnes in the near future, and palm oil and rapeseed oil inventories are also low. Besides, there exists a global inflation expectation. The overall fundamentals remain bullish in the market. Meanwhile, 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 partial decline in China today. Grade I corn oil is offered at 10,100-10,300 CNY/tonne. (Shandong 10,100-10,300 CNY/tonne, down 100 CNY/tonne; Hebei 10,200; Liaoning 10,200; Sichuan 10,200); crude corn oil is offered at 8,300-8,700 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 due to sustained loss, and buyers will soon start stocking up packaging oils for the festival season, which may be positive to corn oil market. Overall, corn oil market is predicted to keep firm in the short run.

(USD $1=CNY ¥6.53)