Today (Dec 9), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered lower by 40 CNY at 4,620-4,750 CNY/tonne at Shandong ports today. The volume of U.S. soybeans arriving at China’s ports have been enormous, and domestic market is in increasing supplies due to easing commodity inspection at ports. But domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans. In addition, China is buying up on U.S. and Brazilian soybeans, which may further add to the arrivals at ports. These are all bearish to imported soybean prices in China. Overall, short-term imported soybean market is predicted to steady with a weakening trend.

Cottonseed: Cottonseed prices rise by 0.01-0.06 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 closed lower on Tuesday as rains had eased dryness in South America and were expected in the coming one week to ten days, in addition to a stronger dollar index. And on China’s Dalian Commodity Exchange today, soybean oil futures continue declines but stay above the previous close, and palm olein swing to move higher. In the spot markets, soybean oil fluctuates by 30-90 CNY/tonne and palm oil up 100 CNY/tonne. Buyers remain cautious due to a volatile trend on Dalian, so the trade is tepid in the spot market with some low-level purchases.

Domestic crushers have been lowering down operation rates for two straight weeks due to swelling soybean meal inventories, so that soybean oil stocks further drop to 1.08 mln tonnes. And palm oil and rapeseed oil stockpiles are also small in China. Meanwhile, domestic consumers will soon start stocking up packaging oils for the Chinese Lunar New Year. Hence, the oils market is keeping an uptrend in fluctuation. But Dalian soybean oil has been resisted at the key 8,000 level for several times and the market is volatile, so participants need to keep good balance of buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,120-8,220 CNY/tonne in domestic coastal areas, fluctuating by 30-90 CNY/tonne. (Tianjin traders 8120; Rizhao traders 8170; Zhangjiagang traders 8220; and Guangzhou traders 8150). 

Palm oil: RBD palm olein is mainly priced at 6,770-6,860 CNY/tonne in coastal areas, mostly up 90-100 CNY/tonne. (Tianjin traders 6840-6860, up 90; Rizhao not available; Zhangjiagang traders 6770-6790, up 100; Guangzhou traders 6790-6810, up 90; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Tuesday, and rapeseed oil futures slightly fluctuate on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices go up 10-20 CNY to 9,830-10,000 CNY/tonne in coastal regions in tepid trading.

Rapeseed crush remain low in China now amid tensions between Beijing and Ottawa. China’s rapeseed oil stocks are only 178,000 tonnes, and soybean oil and palm oil inventories are also low compared to the same period in history; hence, there is no pressure in oils supplies. Meanwhile, domestic buyers will gradually start stocking up oils for the New Year’s Day and Lunar New Year, which is supporting rapeseed oil market. However, 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. On the whole, rapeseed oil market is predicted to maintain at the high level, but the trade is mainly from rigid demand.

Cottonseed oil: Cottonseed oil prices keep steady today. Soybean oil futures drop today but move above the previous close on China’s Dalian Commodity Exchange. And Dalian palm oil futures swing to higher. In the cash market, soybean oil fluctuates by 30-90 CNY/tonne, and palm oil rises by 90 CNY/tonne. The operation rate in soybean crushing mills has fallen for two weeks in a row 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. 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.

As sunflower oil prices stay high recently, downstream buyers are cautious and buying on immediate demand, which is bearish to the 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, down 100 CNY/tonne. (Shandong 10,100-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,100, down 100 CNY/tonne; Sichuan 10,100); 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).

As a continuous fall in corn germ prices is adding bearish sentiment to the market, in addition to high spot corn oil prices, the majority of millers tend to stay on the sidelines. This is weighing on the spot market. But millers have sentiment in lifting prices due to sustained losses. Overall, short-term corn oil market is predicted to have small downside space and to keep a strengthening pattern.

(USD $1=CNY ¥6.53)