Today (Jan 5), 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 further increase by 0.02-0.05 CNY/kg in 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 since yesterday, 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 notably narrowed gains on Monday, and oils futures stay stagnant and decline on profit-taking on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 20-100 CNY/tonne and palm oil down 10-40 CNY/tonne, both in lukewarm trade.

Weather remains dry in South America, and Argentine grain inspectors continue to strike after soy crushing companies struck a deal with oilseed workers, so U.S. soybean prices maintain at the high level, lifting the import cost of soybeans in China. In addition, Malaysian palm oil exports are decent and its production is projected to fall in the first quarter of 2021, and Indonesian government has announced to proceed with the implementation of mandatory B30 blending program, which together pushed BMD palm oil futures to hit a fresh high in near ten years. And as soybean crush fell 9.2% to 1.71 mln tonnes last week, domestic soybean oil stocks further reduced by 4% to 958,000 tonnes and several mills have completed sales for the first quarter; and rapeseed oil and palm oil stockpiles also remain low in China. The overall oils market in China is expected to stay high with a strengthening trend ahead of the Chinese Lunar New Year. But there is like to be 8.15 mln tonnes of soybean cargoes arriving at domestic ports in January, and domestic oils market has been in fallow trade at current high levels. These may add fluctuations to the market, so it is necessary to keep good balance of buying and selling.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,720-8,940 CNY/tonne in domestic coastal areas, a decline of 20-100 CNY/tonne. (Tianjin traders 8720; Rizhao traders 8750; Zhangjiagang traders not available; and Guangzhou traders 8890-8940). 

Palm oil: RBD palm olein is mainly priced at 7,350-7,460 CNY/tonne in coastal areas, mostly down 10-40 CNY/tonne. (Tianjin traders 7430-7450, down 20; Rizhao traders 7460, down 10; Zhangjiagang traders 7420, down 30; Guangzhou traders 7350-7380, down 40; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued closing higher on Monday, and rapeseed oil futures stay below the previous close in spite of gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 30 CNY at 10,440-10,520 CNY/tonne in coastal regions in tepid trading.

The consumption of rapeseed oil in China is subject to its big price spread with soybean oil and palm oil at present. But rapeseed oil stocks are only 125,000 tonnes and in supply tensions under low rapeseed crush. Besides, domestic soybean oil stockpiles also fell 4.44% to 958,000 tonnes. And December production and exports bode well for a continued decline in Malaysian palm oil inventories. Hence, the oils market is not bearing supply pressure. Rapeseed oil market in China is predicted to have limited downside space and to maintain at high levels overall.

Cottonseed oil: Cottonseed oil prices partly fluctuate by 50-200 CNY/tonne in stability today. U.S. soybean narrowed its rises in overnight trading. Oils futures pare gains on profit taking on China’s Dalian Commodity Exchange today. In the cash market, soybean oil declines by 20-100 CNY/tonne and palm oil falls by 10-40 CNY/tonne. Soybean arrival for January could amount to 8.15 mln tonnes. And oils have been in subdued trade after its prices rise to high levels. Besides, cottonseed oil price is dragged down by limited demand from market. On the other hand, U.S. soybeans remain high, pushing up the cost of importing soybean. Malaysia’s palm oil exports perform well. Soybean oil stocks continue falling. Also, rapeseed oil and palm oil stockpiles are at low levels. Moreover, cottonseed crushing mills reduce the operation rate. Hence, the overall oils market will maintain an uptrend before the Lunar New Year. It is predicted that short-term cottonseed oil market will keep range-bound and stay strong at the high level on the whole.

Sunflower oil: Sunflower oil prices steady with a partial rise of 50 CNY/tonne in China today. Grade I imported sunflower oil is offered at 10,100-10,800 CNY/tonne; crude sunoil is offered at 9,700-10,200 CNY/tonne.

As soybean crush fell 9.2% to 1.71 mln tonnes last week, domestic soybean oil stocks further reduced by 4% to 958,000 tonnes and several mills have completed sales for the first quarter; and rapeseed oil and palm oil stockpiles also remain low in China. In addition, the cost of importing sunflower oil is lifted by high-level prices in Ukraine, which is also bullish to domestic market. However, U.S. soybean futures notably narrowed gains on Monday, and Dalian oils futures also decline on profit-taking today. Spot soybean oil and palm oil prices are both lower in China today. Besides, 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. Overall, 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, up 100 CNY/tonne from yesterday. (Shandong 10,200-10,400 CNY/tonne, up 100 CNY; Hebei 10,200; Liaoning 10,000; Sichuan not available); crude corn oil is offered at 8,500-8,600 CNY/tonne, fluctuating by 100 CNY/tonne. (Hebei 8,500-8,600 CNY/tonne, up 100 CNY; Henan 8,500; Inner Mongolia 8,600, down 100 CNY).

Domestic millers still have sentiment to raise corn oil prices on higher corn germ prices and as buyers have started stocking up packaging oils, which is positive to corn oil market. But spot corn oil prices remain high, 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 ¥6.48)