Today (Dec 21), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered at 4,850 CNY/tonne at Shandong ports today, a rise of 100 CNY/tonne from last Friday. As soybean of lower prices have almost been digested, in addition to limited supplies at ports now, some traders are stalling sales, which helps lifting prices. However, commodity inspections are relax at ports now, so that imported soybeans are in growing supplies. And 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 in the short term.

Cottonseed: Cottonseed prices in part increase by 0.02-0.06 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 short-term cottonseed price will keep steady and trend up.

Oils: 

Summary: CBOT soybean futures surged last Friday on strong exports and as the precipitation outlook in South American remained uncertain, and meanwhile, Argentine workers had been on strike for over one week. And oils futures continue rising but stay below the previous close on China’s Dalian Commodity Exchange today. In the spot market, soybean oil fluctuates by 10-110 CNY/tonne and palm oil mostly down 30-90 CNY/tonne, both in thin trade.

Rizhao, a city in Shandong Province, adjusts the environmental protection response to red alert from 8 am today, so that all local oil mills have been in downtime. Meanwhile, domestic soybean oil stocks continue falling by 1.5% weekly to 1.02 mln tonnes, and rapeseed oil stockpiles also remain low. Between Dec 1 to 15, Malaysian palm oil exports rose 8.7%-9.8%, so stocks in this country are forecast to keep decreasing. Fundamentals are laying the bullish tone in the oils market. The market is thus predicted to keep an uptrend in fluctuation. However, the market has little appetite for expensive oils, so that it was in very subdued trade last week. Mid-and-downstream consumers may be stimulated to make replenishment in soybean meal market after huge gains in prices today, which will help ease swelling meal inventories, 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 8,510-8,800 CNY/tonne in domestic coastal areas, fluctuating by 10-110 CNY/tonne. (Tianjin traders 8510-8560; Rizhao traders 8600; Zhangjiagang traders 8800; and Guangzhou traders 8610).

Palm oil: RBD palm olein is mainly priced at 7,050-7,130 CNY/tonne in coastal areas, mostly down 30-90 CNY/tonne. (Tianjin traders 7110-7130, down 70; Rizhao 7090-7100, down 90; Zhangjiagang traders 7130; Guangzhou traders 7050,down 30; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose last Friday as investors grew worried that a decline in production in South America would tighten global stockpiles. And rapeseed oil futures fluctuate to edge up on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 10-20 CNY at 10,000-10,070 CNY/tonne in coastal regions in tepid trading.

Tensions between Beijing and Ottawa keep rapeseed crush low in China. China’s rapeseed oil stocks are only 161,600 tonnes at present, a decline of 53% from a year earlier. And the peak consumption ahead of the Chinese Lunar New Year is approaching. These are supporting rapeseed oil market. However, domestic soybean crush rose 2.89% to 2 mln tonnes last week, 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 decline of 50 CNY/tonne in China today. U.S. soybean futures soared last Friday. Oils futures keep rising but stay below the previous close on China’s Dalian Commodity Exchange today. In the spot market, soybean oil fluctuates by 10-110 CNY/tonne and palm oil mostly declines by 30-90 CNY/tonne. Besides, downstream buyers are cautious due to weak demand in cottonseed oil market, dragging down cottonseed oil price. However, soybean oil stocks further decline by 1.5% to 1.02 mln tonnes as crushers suspend operation due to environmental warning in Rizhao and 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. Overall, cottonseed oil market is expected to keep range-bound and go strengthening in later period.

Sunflower oil: Sunflower oil prices are mostly stable with a partial decline 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.

Domestic soybean crush is forecast to go to 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. But domestic soybean oil stocks keep falling to 1.02 mln tonnes and rapeseed oil stockpiles also remain low. 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. Overall, sunflower oil market in China is predicted to fluctuate and marginally 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, down 100 CNY; Hebei 10,200; Liaoning 10,000; Sichuan not available); crude corn oil is offered at 8,450-8,700 CNY/tonne, down 50 CNY/tonne from last Friday. (Hebei 8,450-8,600 CNY/tonne, down 50 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 and as buyers have started stocking up packaging oils. In the short term, corn oil market is predicted to be little changed and keep strengthening.

(USD $1=CNY ¥6.55)