Today (Jan 6), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered at 5,100 CNY/tonne at Shandong ports today, up 100 CNY/tonne from yesterday. Some domestic holders are stalling soybean sales under tightening supply at ports, and soybean import cost remains high at present as U.S. soybean prices rally on worries about weather condition in South America. These together bolster port imported soybean prices to go strengthening. But soybean arrivals are increasing at domestic ports due to huge imports from the U.S., so it is quite likely that imported soybean supply will further grow in domestic market. In the short run, imported soybean market is predicted to keep strengthening on bullish factors.

Cottonseed: Cottonseed prices further increase by 0.02-0.06 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 ahead of the Chinese 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 on Tuesday on concerns over dry weather in South America and also supported by a weak U.S. dollar. Oils futures rise again and expand gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 60-160 CNY/tonne and palm oil up 110-180 CNY.

Soybean import cost is constantly rising in Chin as U.S. soybean futures keep rallying. And Malaysian palm oil production fell for a third consecutive month while export rose, so the market forecast that December-end stockpiles might have declined to the lowest in 13 years, which helped BMD palm oil futures perform strongly. And in China, the oils market is supported by favorable fundamentals. For one thing, domestic soybean oil stocks further reduced by 4% to 958,000 tonnes as soybean crush fell 9.2% to 1.71 mln tonnes last week, and several mills have completed sales for the first quarter; for another, rapeseed oil and palm oil stockpiles also remain low. Hence, the overall oils market is predicted to extend a strong trend ahead of the Chinese Lunar New Year. But unstable features in fund ahead of the festival and low acceptability of high-level in spot prices could also add fluctuations to the market. It is suggested to keep good balance of buying and selling and maintain rolling positions temporarily.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,800-9,080 CNY/tonne in domestic coastal areas, a rise of 60-160 CNY/tonne. (Tianjin traders 8800-8830; Rizhao traders 8830; Zhangjiagang traders not available; and Guangzhou traders 9060-9080). 

Palm oil: RBD palm olein is mainly priced at 7,550-7,620 CNY/tonne in coastal areas, mostly up 110-180 CNY/tonne. (Tianjin traders 7590-7620, up 140; Rizhao traders 7610, up 150; Zhangjiagang traders 7550-7570, up 110; Guangzhou traders 7550, up 180; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rallied on Tuesday, and rapeseed oil futures continue rising on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 10-30 CNY at 10,500-10,580 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed oil stocks are only 125,000 tonnes and in supply tensions under low rapeseed crush. And as soybean crush fell 9.2% to 1.71 mln tonnes last week, domestic soybean oil stocks also further reduced by 4% to 958,000 tonnes. Meanwhile, Malaysian palm oil exports are decent and its production is projected to fall in the first quarter of 2021. Hence, there is no pressure in oils supplies, which helps bolster rapeseed oil market. But the consumption of rapeseed oil in China is subject to its big price spread with soybean oil and palm oil at present. Overall, rapeseed oil market in China is predicted to maintain at the high level.

Cottonseed oil: Cottonseed oil prices further increase by 50 CNY/tonne in several regions of China today. U.S. soybean futures skyrocketed overnight on concerns over dry condition in South America and weak US dollars. Oils futures resume the upside and expand rises on China’s Dalian Commodity Exchange today. In the cash market, soybean oil grows 60-160 CNY/tonne and palm oil jumps 110-180 CNY/tonne. The cost of importing soybean is pulled up by climbing US soybean prices. 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 stay strong at the high level on the whole.

Sunflower oil: Sunflower oil prices steady with a partial rise of 100-300 CNY/tonne in China today. Grade I imported sunflower oil is offered at 10,200-10,800 CNY/tonne; crude sunoil is offered at 10,000-10,200 CNY/tonne.

U.S. soybean futures rallied on Tuesday on concerns over dry weather in South America and also supported by a weak U.S. dollar. Oils futures rise again and expand gains on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil also climb. 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. In addition, the cost of importing sunflower oil is lifted by high-level prices in Ukraine, which is also bullish to domestic market. Overall, sunflower oil prices will probably steady with a slight rise in the near term.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil is offered at 10,000-10,300 CNY/tonne. (Shandong 10,200-10,400 CNY/tonne; Hebei 10,200; Liaoning 10,000; Sichuan not available); crude corn oil is offered at 8,500-8,600 CNY/tonne. (Hebei 8,500-8,600 CNY/tonne; Henan 8,500; Inner Mongolia 8,600).

Feedstock corn germ prices keep rising, and some millers have been out of stock or in tightening supplies while buyers have started to stocking packaging oils; hence, some domestic enterprises still have sentiment to support corn oil prices. This is bullish to corn oil market. But corn oil is not price-competitive compared to other oils, which may add some bearish sentiment. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.46)