Today (Dec 15), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: 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 0.01-0.03 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 on Monday, but oils futures open high but move lower for a lack of upward momentum and actually stay below the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 20-80 CNY/tonne and palm oil also down 60 CNY, both in lukewarm trade.

Domestic crushers picked up soybean crush by 9% to 1.95 mln tonnes last week as soybean imports remain huge and to ensure soybean oil supply, and the crush is expected to go above 2 mln tonnes weekly in the coming two weeks. Funds are less active now for a lack of stimulation of fresh news, and investors took profits when Dalian soybean oil futures rose near to the key level of 8,000, so that soybean oil was still unable to steady at that level. In addition, weather conditions have improved in South America. Hence, the oils market fluctuates frequently in China. But BMD palm oil futures rose to the highest in more than eight years on the forecast for lower production and improving exports. Moreover, domestic buyers have commenced stocking up packaging oils for the holidays, so that commercial soybean oil stocks have been falling, and rapeseed oil stocks also remain low. Therefore, participants are positive about the market. Oils futures are quite volatile recently, so participants need to remain cautious.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,250-8,380 CNY/tonne in domestic coastal areas, a decline of 20-80 CNY/tonne. (Tianjin traders 8250; Rizhao traders 8300; Zhangjiagang traders 8380; and Guangzhou traders 8300). 

Palm oil: RBD palm olein is mainly priced at 6,930-7,000 CNY/tonne in coastal areas, mostly down 60 CNY/tonne. (Tianjin traders 7000, down 60; Rizhao not available; Zhangjiagang traders 6930, down 60; Guangzhou traders 6950, down 60; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued advancing on Monday on an uncertain crop prospect in South America and good export inspection data. 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 30-40 CNY at 9,830-9,980 CNY/tonne in coastal regions in tepid trading.

The supply of soybeans is adequate in China 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 are only 155,000 tonnes in the country. Meanwhile, soybean oil and palm oil inventories are also low and the peak season for stocking up oils ahead of holidays is also approaching, so there is no pressure on the supply side. 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 CNY/tonne in China today. Oils futures are a bit weak in gains and move lower after high opening on China’s Dalian Commodity Exchange today, lower than previous close. In the spot market, soybean oil is down 20-80 CNY/tonne and palm oil down 60 CNY/tonne. Downstream buyers are cautious due to weak demand in cottonseed oil market, which may weigh on its market. Besides, market expects a reduction in palm oil production and improved export. And the business inventory of soybean oil has fallen consecutively as domestic buyers have started stocking up packaging oils for New Year’s Day and the Chinese Lunar New Year. Also, rapeseed oil and palm oil stockpiles are at low levels. 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 edge down in the near term, but it is expected to go strengthening in later period.

Sunflower oil: Sunflower oil prices steady with a partial decline of 50-150 CNY/tonne in China today. Grade I imported sunflower oil is offered at 10,100-10,800 CNY/tonne; crude sunoil is offered at 9,650-9,750 CNY/tonne.

U.S. soybean futures rose on Monday, but oils futures open high but move lower for a lack of upward momentum and actually stay below the previous close on China’s Dalian Commodity Exchange today. Spot soybean oil and palm oil prices also decline in China today. Downstream factory owners remain cautious in sunflower oil market and usually take hand-to-mouth buying as prices stay high, which is adding bearish impact to the market. But commercial soybean oil stocks keep falling, and palm oil and rapeseed oil stocks remain low in China, so 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 fluctuate to slightly decline in the short run.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil is offered at 10,000-10,300 CNY/tonne. (Shandong 10,100-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,100; Sichuan 10,000); crude corn oil is offered at 8,300-8,700 CNY/tonne. (Hebei 8,500-8,600 CNY/tonne; 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)