Today (Dec 18), 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 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: CBOT soybean futures soared past the $12 a bushel mark on Thursday on robust exports and as the dollar sunk to a two-and-a-half-year low. And on China’s Dalian Commodity Exchange today, soybean oil futures post wide gains and palm olein with smaller rises. In the spot markets, soybean oil and palm oil go up 90-200 CNY/tonne, both in thin trade.

The cost of importing soybeans is further lifted by sharp rises in U.S. soybeans. During December 1 to 15, Malaysian palm oil exports rose 8.7%-9.8% from a month earlier, while production fell 10.91%, according to a released by SPPOMA. Malaysian palm oil stockpiles will probably extend the decline, thus supporting BMD palm oil futures. In addition, soybean oil shipments are in tensions as domestic mills at some ports suspend production due to environmental protection issues, while domestic customers have started stocking up packaging oils for holidays. Currently, soybean oil stocks have fallen to 1.04 mln tonnes, and rapeseed oil stockpiles are also small. These positive fundamentals will set the tone for a bullish market outlook. In the short term, the oils market is forecast to maintain a strengthening trend. However, domestic soybean crush is expected to go above 2 mln tonnes weekly in coming two weeks due to huge soybean arrivals at ports, and the withdrawal of fund toward the end of the year will also add to fluctuations in the market, so it still requires some attention.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,540-8,750 CNY/tonne in domestic coastal areas, a rise of 90-200 CNY/tonne. (Tianjin traders 8540-8570; Rizhao traders 8580; Zhangjiagang traders 8730-8750; and Guangzhou traders 8550). 

Palm oil: RBD palm olein is mainly priced at 7,080-7,180 CNY/tonne in coastal areas, mostly up 90-100 CNY/tonne. (Tianjin traders 7170-7180, up 100; Rizhao 7170, up 100; Zhangjiagang traders 7110-7130, up 90; Guangzhou traders 7080-7090, up 90; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Thursday, bolstered by signs of strong exports and concerns over crops in South America. Rapeseed oil futures trade moderately higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 30 CNY at 9,980-10,130 CNY/tonne in coastal regions in tepid trading.

As it is said that port congestion in Canada has caused a delay in rapeseed oil shipments, rapeseed oil stocks keep declining in coastal regions in China. Besides, tensions between Beijing and Ottawa keep rapeseed crush low in China, China’s rapeseed oil stocks are only 155,000 tonnes, and soybean oil and palm oil inventories are also low, so there is no pressure on the supply side. However, 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. Overall, short-term rapeseed oil prices will likely continue staying at the high level, but there will be mainly rigid demand in the market.

Cottonseed oil: Cottonseed oil prices keep steady with a partial rise of 50 CNY/tonne in China today. U.S. dollar eased to a two-and-half-a-year low against Chinese yuan. U.S. soybean futures rose to over 1,200 cents on the news and strong export. Soybean oil posts wide rises on China’s Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil jump 90-200 CNY/tonne higher. In this case, the cost of importing soybean further increases. 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, oils market is boosted based on bullish fundamentals. 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 is expected to go strengthening in later period.

Sunflower oil: Sunflower oil prices are mostly stable and some mixed 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.

CBOT soybean futures soared past the $12 a bushel mark on robust exports and as the dollar sunk to a two-and-a-half-year low. And on China’s Dalian Commodity Exchange today, soybean oil futures post wide gains and palm olein with smaller rises, and spot soybean oil and palm oil both go higher. Meanwhile, sunflowerseed prices are high due to a reduction in production, so domestic millers have strong sentiment in propping up sunflower oil prices, which is positive to sunflower oil market. But domestic soybean crush is forecast to go above 2 mln tonnes weekly in 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. Overall, sunflower oil market in China is predicted to fluctuate to slightly decline 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 10,200-10,300 CNY/tonne; Hebei 10,200; Liaoning 10,000, down 100 CNY; 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. In the short term, corn oil market is predicted to fluctuate at a narrow range.

(USD $1=CNY ¥6.53)