Today (Dec 17), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered steadily at 4,750 CNY/tonne at Shandong ports today. Soybean of lower prices previously have almost been digested, but the supply will gradually be increaisng under relaxed commodity inspections at ports. Moreover, imports of U.S. soybeans remain substantial, which will further add to supply in domestic market. Meanwhile, domestic purchasers tend to choose domestic soybeans and have little appetite for imported soybeans. These are all negative to imported soybean market. Overall, imported soybean market is predicted to steady with a weakening trend in the short term.

Cottonseed: Cottonseed prices decline by 0.02 CNY/kg in some regions of 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 short-term cottonseed price will fluctuate narrowly in stability.

Oils: 

Summary: U.S. soybean futures fell on Wednesday on a profit-taking. And on China’s Dalian Commodity Exchange today, soybean oil futures slow down gains, and palm oil stays below the previous close. In the spot markets, soybean oil goes up 50-60 CNY/tonne, but palm oil mostly down by 20-40 CNY/tonne, both in lukewarm trade.

It is reported that Indonesia is mulling on lowering its palm oil biofuel allocation for 2021 to 8.5 million kilolitres (kl), from current plan of 9.2 million kl, which will reduce palm oil consumption by about 600,000 tonnes. Hence, oils futures come under pressure. Moreover, domestic soybean crush is forecast to go above 2 mln tonnes weekly in coming two weeks due to huge soybean arrivals at ports, which is also adding bearish sentiment to the market. However, the peak season for stocking up packaging oils ahead of holidays has commenced. Currently, soybean oil stocks have fallen to 1.04 mln tonnes, and rapeseed oil inventories are also low. Therefore, participants mostly remain positive about the market prospect. The oils market is predicted to continue following futures to fluctuate frequently in the short term, but also to stay at the high level on the whole.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,440-8,540 CNY/tonne in domestic coastal areas, a rise of 50-60 CNY/tonne. (Tianjin traders 8440-8470; Rizhao traders 8450; Zhangjiagang traders 8490-8540; and Guangzhou traders 8440). 

Palm oil: RBD palm olein is mainly priced at 7,030-7,100 CNY/tonne in coastal areas, mostly down 20-40 CNY/tonne. (Tianjin traders 7090-7100, down 40; Rizhao 7090, down 40; Zhangjiagang traders 7050, down 20; Guangzhou traders 7030, down 20; and Xiamen not available).

Rapeseed oil: U.S. soybean futures declined on Wednesday on a profit-taking. And rapeseed oil futures stay below the previous closed in spite of gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 50 CNY at 9,870-10,020 CNY/tonne in coastal regions in tepid trading.

Domestic soybean crush is expected to return to a high level of over 2 mln tonnes weekly in the next two weeks, as soybean imports remain huge in China. Moreover, the consumption of rapeseed oil is smaller under its huge price spread with soybean oil and palm oil. 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 buyers will soon start stocking up oils for the Spring Festival, so there is no pressure on the supply side. Overall, rapeseed oil market is predicted to have smaller downside space and to maintain at the high level.

Cottonseed oil: Cottonseed oil prices keep steady with a partial rise of 50 CNY/tonne in China today. U.S. soybean futures fell on Wednesday on profit taking. Soybean oil slows the rises on China’s Dalian Commodity Exchange today, with a rise of 50-60 CNY/tonne in the spot market. Besides, soybean oil stocks further decline by 4% to 1.04 mln tonnes as domestic buyers have started stocking up packaging oils for New Year’s Day and the Chinese Lunar New Year. Also, rapeseed oil stockpiles are at low levels. Hence, market participants still bull oils market. Moreover, cottonseed oil millers are facing sustained loss, so that they have certain sentiment in lifting prices. But downstream buyers are cautious due to weak demand in cottonseed oil market. Overall, cottonseed oil market will remain flat relatively in the near term, but it is expected to go strengthening in later period.

Sunflower oil: Sunflower oil prices are mostly stable with a partial decline of 50 CNY/tonne in China today. Grade I imported sunflower oil is offered at 10,000-10,800 CNY/tonne; crude sunoil is offered at 9,650-9,750 CNY/tonne.

Indonesia may lower its palm oil biofuel allocation for 2021 to 8.5 million kilolitres (kl), from current plan of 9.2 million kl, which will reduce palm oil consumption by about 600,000 tonnes. Hence, oils futures come under pressure. Moreover, domestic soybean crush is forecast to go above 2 mln tonnes weekly in the coming two weeks due to huge soybean arrivals at ports. In addition, 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 the peak season for stocking up packaging oils before the holidays has started. Meanwhile, sunflowerseed prices are high due to a reduction in production, so 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 steady in China today. Grade I corn oil is offered at 10,000-10,300 CNY/tonne. (Shandong 10,200-10,300 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. But millers have sentiment in propping prices due to sustained loss. Corn oil market is predicted to steady in the short term, and remain strengthening overall.

(USD $1=CNY ¥6.54)