Today (Dec 14), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybeans are offered lower by 150 CNY at 4,450-4,700 CNY/tonne at Shandong ports today. Local authorities have relaxed commodity inspections at ports, and soybean imports from the U.S. are substantial, so the supply of imported soybeans will be increasing at ports. Besides, Chinese importers are actively buying up soybeans from the U.S. and Brazil, which will also improve supply in domestic market. Nevertheless, domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans. Overall, short-term imported soybean market is predicted to go with a weakening trend.

Cottonseed: Cottonseed prices decline by 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 in Shandong have suspended operation due to environmental warning. Hence, they have strong 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 last Friday on tightening supplies of U.S. soybeans and dry weather in northern part of Brazil. Oils futures open low but move higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 20-100 CNY/tonne and palm oil mostly down 20 CNY/tonne, in tepid trade.

Soybean crush rose 9% to 1.95 mln tonnes in China last week and will continue climbing in the coming two weeks and possibly to more than 2 mln tonnes. But soybean oil stocks fell 4% to 1.04 mln tonnes as buyer have commenced stocking up packaging oils for the festival season and with the support of state purchases. Moreover, palm oil and rapeseed oil stocks remain low in China. Therefore, fundamental bode well for the oils market in the first half of 2021, and the overall market is predicted to keep an uptrend in fluctuation. But investors always took profits recently before Dalian soybean oil futures were to hit the 8,000 level, which led to strong fluctuation. In the short run, it is necessary to avoid frequent fluctuations.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,270-8,370 CNY/tonne in domestic coastal areas, a rise of 20-100 CNY/tonne. (Tianjin traders 8270-8280; Rizhao traders 8330; Zhangjiagang traders 8370; and Guangzhou traders 8320). 

Palm oil: RBD palm olein is mainly priced at 6,950-7,000 CNY/tonne in coastal areas, mostly down 20 CNY/tonne. (Tianjin traders 7000, down 20; Rizhao 7000, down 20; Zhangjiagang traders 6950, down 20; Guangzhou traders 6950, down 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose last Friday, and rapeseed oil futures stay below the previous close in spite of rises on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 60-80 CNY to 9,710-9,910 CNY/tonne in coastal regions in tepid trading.

Soybean crush rose 9% to 1.95 mln tonnes in China last week as soybean is in adequate supply due to huge cargo arrivals at ports, and the consumption of rapeseed oil is smaller under its huge price spread with soybean oil and palm oil. These are dragging down rapeseed oil market. However, tensions between Beijing and Ottawa keep rapeseed crush low in China, and rapeseed oil stocks fell 13% to 155,000 tonnes in the country last week. Meanwhile, the peak season for stocking up oils ahead of the Spring Festival is also approaching. These bolster rapeseed oil prices to snap off declines to rise. Overall, rapeseed oil market is predicted to have limited downside space and to maintain at the high level.

Cottonseed oil: Cottonseed oil prices keep steady with a partial decline of 50-100 CNY/tonne in China today. Downstream buyers are cautious due to weak demand in cottonseed oil market, which may weigh on its market. But U.S. soybean futures rose last Friday. Oils futures move higher after low opens on China’s Dalian Commodity Exchange today, and spot soybean oil rises by 20-100 CNY/tonne. Besides, soybean oil stocks further drop 4% to 1.04 mln tonnes, and rapeseed oil and palm oil stockpiles are also at low levels, while domestic buyers have started stocking up packaging oils for New Year’s Day and 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. Overall, cottonseed oil market will remain range-bound in the near term, but it is expected to go strengthening.

Sunflower oil: Sunflower oil prices steady and some fluctuate to adjust in China today. Grade I imported sunflower oil is offered at 10,200-10,800 CNY/tonne; crude sunoil is offered at 9,700-9,800 CNY/tonne.

Downstream factory owners remain cautious and usually take hand-to-mouth buying as sunflower oil prices stay high, which is adding bearish impact to the market. But soybean oil stocks fell 4% to 1.04 mln tonnes as buyer have commenced stocking up packaging oils for the festival season and with the support of state purchases. Moreover, palm oil and rapeseed oil stocks remain low in China. Therefore, fundamental bode well for the oils 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 10,000-10,300 CNY/tonne, down 100 CNY/tonne. (Shandong 10,100-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,100; Sichuan 10,000, down 100 CNY); crude corn oil is offered at 8,300-8,700 CNY/tonne. (Hebei 8,500-8,600 CNY/tonne, down 50 CNY; Henan 8,500; Inner Mongolia 8,700).

Corn germ prices keep falling from the high level at present, and spot corn oil prices also remain high, which are bearish to the market. In addition, the supply of corn oil is increasing as there is a pickup in operation rates, whilst downstream buyers are not active in delivery due to dismal demand, which are weighing down spot prices. But millers have sentiment in propping prices as the cost remains high. Overall, short-term corn oil market is predicted to stay at the high level.

(USD $1=CNY ¥6.54)