Today (Jan 4), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered at 5,000 CNY/tonne at Shandong ports today. Some traders are unwilling to sell under tight supply at port now, and the cost import remains high due to a strong trend in U.S. soybean prices, which together bolster imported soybean prices at port to keep strengthening. However, commodity inspections are relax at ports now, and imports of U.S. soybeans are huge, so it is very likely that imported soybean supply will get increasing in China. In the short term, imported soybean market may keep strengthening on bullish factors.

Cottonseed: Cottonseed prices increase by 0.02-0.10 CNY/kg in some regions of China today. Cottonseed output this year is lower than the previous year. And with ginning factories in North Xinjiang idled successively, cottonseed availability is gradually decreasing. Moreover, traders who have stocks in hand look bullish on after-market and ranchers have started stocking up ahead of the Lunar New Year, supporting cottonseed market. However, the delivery of cottonseed is still under impact of the COVID-19 outbreak in Xinjiang. Furthermore, cottonseed crushing mills keep facing losses as cottonseed price remains too high, so traders and oil plants are cautious in making purchase. It is expected that short-term cottonseed price will stay firm as oils and meals go up together.

Oils: 

Summary: U.S. soybean futures rallied to a fresh six-and-a-half-year high last Thursday as dry weather clouded soybean crop prospect in South America. Oils futures continue rising on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 100-160 CNY/tonne and palm oil up 140-210 CNY/tonne, both in thin trade.

Malaysian palm oil exports rose over 19% month on month in December. Palm oil offers in producing countries are now strongly supported by further lower stocks in Malaysia and sharply higher export duties in Indonesia. And in China, soybean oil stockpiles fell further by 4.44% to 958,000 tonnes last week, as soybean crush declined by 9.2% to 1.71 mln tonnes subject to swollen meal inventories; and rapeseed oil and palm oil stocks are also at low levels. The overall oils market in China is expected to stay high with a strengthening trend ahead of the Chinese Lunar New Year. But the market has been in lukewarm trade at recent high prices, and Dalian oils futures are narrowing gains in afternoon session, so it is necessary to keep good balance of buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,800-9,050 CNY/tonne in domestic coastal areas, a rise of 100-160 CNY/tonne. (Tianjin traders 8800-8810; Rizhao traders 8800; Zhangjiagang traders not available; and Guangzhou traders 9050). 

Palm oil: RBD palm olein is mainly priced at 7,480-7,550 CNY/tonne in coastal areas, mostly up 140-210 CNY/tonne. (Tianjin traders 7530-7550, up 140; Rizhao traders not available; Zhangjiagang traders 7500, up 210; Guangzhou traders 7480, up 170; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rallied to a new six-and-a-half-year high last Thursday as a potential crop failure under dry weather in South America would tighten global supplies. Rapeseed oil futures open high and expand gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 210-240 CNY at 10,470-10,550 CNY/tonne in coastal regions in tepid trading.   

China’s rapeseed oil stockpiles fell 11.5% weekly to 125,700 tonnes last week under low rapeseed crush, and soybean oil stocks will also continue declining under lower soybean crush last week. Meanwhile, December production and exports bode well for a continued decline in Malaysian palm oil inventories. The overall oils market is not bearing supply pressure, which is buoying rapeseed oil market. But the consumption of rapeseed oil is smaller under its big price spread with soybean oil and palm oil. Overall, rapeseed oil market is predicted to stay at the high level, but mainly with rigid demand in the market.

Cottonseed oil: Cottonseed oil prices further increase by 50-100 CNY/tonne in some regions of China today. U.S. soybean futures recorded a six-and-a-half-year high last Thursday on uncertain soybean outlook due to dry conditions in South America. Oils futures stages further gains on China’s Dalian Commodity Exchange today. In the cash market, soybean oil jumps 100-160 CNY/tonne and palm oil soars 140-210 CNY/tonne. Malaysia’s palm oil exports during December represent a significant increase of more than 19% compared to last month, shoring up market sentiment. Besides, soybean oil stocks have dropped by 4.44% from the previous week to 958,000 tonnes. Also, rapeseed oil stockpiles are at low levels. Hence, the overall oils market will maintain an uptrend before the Lunar New Year. Moreover, cottonseed oil millers are facing sustained loss, so that they have certain sentiment in lifting prices. Therefore, it is predicted that short-term cottonseed oil market will stay strong at the high level on the whole.

Sunflower oil: Sunflower oil prices are mostly stable and some mixed in China today. Grade I imported sunflower oil is offered at 10,100-10,800 CNY/tonne; crude sunoil is offered at 9,700-10,200 CNY/tonne.

U.S. soybean futures rallied to a six-and-a-half-year high last Thursday as dry weather clouded soybean crop prospect in South America. Oils futures continue rising on China’s Dalian Commodity Exchange today, and spot soybean oil goes up 100-160 CNY/tonne and palm oil up 140-210 CNY/tonne. And the cost of importing sunflower oil is lifted by high-level prices in Ukraine, which is also bullish to domestic market. However, downstream buyers are cautious in sunflower oil market due to high prices and tend to buy on immediate demand, so the market has been in lukewarm trade. In addition, some buyers also choose corn oil as a substitute, so some sunflower oil millers have weaker sentiment in supporting prices, which is also bearish to the market. On the whole, sunflower oil prices will likely fluctuate in the near term.

Corn oil: Corn oil prices are mostly stable and some mixed 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 10,000; Sichuan not available); crude corn oil is offered at 8,500-8,700 CNY/tonne, fluctuating by 100 CNY/tonne from last Thursday. (Hebei 8,500-8,600 CNY/tonne, fluctuating by 100 CNY; Henan 8,500; Inner Mongolia 8,700).

Domestic millers have certain sentiment to raise corn oil prices on higher corn germ prices and as buyers have started stocking up for packaging oils. This is positive to corn oil market. But spot corn oil prices remain high at present, and most millers tend to wait on the sidelines, which is adding bearish sentiment to the market. Overall, corn oil market is predicted to keep strengthening.

(USD $1=CNY ¥6.54)