Today (Dec 10), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered 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 are stable with a partial decline of 0.01-0.02 CNY/kg in China 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. But cottonseed output this year is lower than the previous year and cottonseed oil prices stay firm, which supports cottonseed market. It is expected that cottonseed price will fluctuate narrowly in a short term.

Oils: 

Summary: U.S. soybean futures rose on short covering on Wednesday, as the USDA was expected to continue lowering its estimates for U.S. and global soybean stockpiles. Oils futures fluctuate to decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially drops by 30-60 CNY/tonne, and palm oil down 50 CNY/tonne, in tepid trade.

Malaysian crude palm oil production fell 13.5% month over month in November, but exports saw a higher-than-expected decline of 22%, which led to a higher-than-forecast month-ending stockpiles, according to the report by MPOB. Hence, the report fails to lend a support to futures market. However, 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. In the short term, the oils market is predicted to be volatile and participants can wait for cues from the USDA report due Thursday.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,090-8,190 CNY/tonne in domestic coastal areas, a partial decline of 30-60 CNY/tonne. (Tianjin traders 8090; Rizhao traders 8190; Zhangjiagang traders 8150-8170; and Guangzhou traders 8110-8120).

Palm oil: RBD palm olein is mainly priced at 6,720-6,810 CNY/tonne in coastal areas, mostly down 50 CNY/tonne. (Tianjin traders 6790-6810, down 50; Rizhao not available; Zhangjiagang traders 6720-6740, down 50; Guangzhou traders 6740-6750, down 50; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Wednesday. But rapeseed oil futures open low and extend losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices drop by 120-140 CNY to 9,690-9,840 CNY/tonne in coastal regions in tepid trading.

China’s soybean imports remain huge, and the consumption of rapeseed oil is smaller under its huge 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. These will help limit the decline in rapeseed oil prices. The overall rapeseed oil market is predicted to stay at the high level.

Cottonseed oil: Cottonseed oil prices keep steady in China today. Soybean oil stocks in China further drop to 1.08 mln tonnes as domestic crushers keep lowering down operation rates for two consecutive weeks for swelling meal inventories. Likewise, palm oil and rapeseed oil stockpiles are also at low levels, while domestic buyers will soon start stocking up packaging oils for the Chinese Lunar New Year. Hence, fundamentals are still bullish, and the bulk oils market will keep an uptrend in fluctuation. Moreover, cottonseed oil millers are facing sustained loss, so that they have certain sentiment in lifting prices. However, oils futures fluctuate to decline on China’s Dalian Commodity Exchange today, and spot soybean oil goes down 30-60 CNY/tonne and palm oil down 50 CNY/tonne. Downstream buyers are cautious due to weak demand in cottonseed oil market. Overall, cottonseed oil market is stable now, but it is expected to go strengthening.

Sunflower oil: Sunflower oil prices steady 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. U.S. soybean futures rose on short covering on Wednesday, as the market expected the USDA to continue reducing U.S. and global soybean stockpiles in December report. Oils futures fluctuate to decline on China’s Dalian Commodity Exchange today, and spot soybean oil price and palm oil price both decline. These are all 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 in China today. Grade I corn oil is offered at 10,100-10,300 CNY/tonne. (Shandong 10,100-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,100; 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 ¥6.55)