Today (Jan 8), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: U.S. Gulf soybean is offered at 5,150 CNY/tonne at Shandong ports today, up 50 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 0.02-0.03 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 declined on Thursday on profit-taking and a resolution to an Argentine port workers' strike. Oils futures fluctuate on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially goes up 20 CNY/tonne and palm oil down 30 CNY/tonne, and the trade may be weaker than yesterday.

Domestic oil millers will pick up soybean crush as brisk soybean meal trade this week has eased inventory pressure, dragging oils market down to adjust in short run. Growth in Indonesian palm oil stockpiles exceeds the forecast so that the market is concerned about a delay in implementing biodiesel program in this country, which is now pressuring BMD palm oil futures. But the market has forecast for extremely low palm oil stocks in Malaysia, and continuing sharp rises in U.S. soybean prices are lifting the cost for Chinese importers. In addition, China’s soybean oil stockpiles have further fallen to around 950,000 tonnes and some mills have sold out supplies for the first quarter, leading to tightening supplies in some spot markets. Meanwhile, its rapeseed oil and palm oil inventories are also low. Dominated by bullish factors, the oils market is predicted to have limited downside space in the short term and to maintain a relatively strong pattern on the whole.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,880-9,160 CNY/tonne in domestic coastal areas, a partial rise of 20 CNY/tonne. (Tianjin traders 8890-8910; Rizhao traders 8880; Zhangjiagang traders 9160; and Guangzhou traders 9110). 

Palm oil: RBD palm olein is mainly priced at 7,640-7,690 CNY/tonne in coastal areas, mostly down 30 CNY/tonne. (Tianjin traders 7670-7690, down 30; Rizhao traders not available; Zhangjiagang traders 7650-7670, down 30; Guangzhou traders 7640-7650, down 30; and Xiamen not available).

Rapeseed oil: CBOT soybean futures fell on Thursday, and rapeseed oil futures marginally swing on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 10 CNY at 10,690-10,740 CNY/tonne in coastal regions in tepid trading.

Domestic oils market is under no supply pressure, as rapeseed oil stocks are only 125,000 tonnes, soybean oil stocks have further fallen to 950,000 tonnes and palm oil inventories are also low. And some factories have completed sales for the first quarter. Hence, domestic rapeseed oil market is predicted to keep a strong pattern ahead of the Spring Festival. But funds will be unstable ahead of the festival, and the consumption of rapeseed oil in China may also be affected by its big price spread with soybean oil and palm oil at present, so it is necessary to avoid risk of short-term fluctuations.

Cottonseed oil: Cottonseed oil prices further increase by 100 CNY/tonne in several regions of China today. U.S. soybean futures pared gains overnight on profit taking and an end of Argentine work stoppage. Oils futures are range-bound on China’s Dalian Commodity Exchange today. And spot soybean oil partly up by 20 CNY/tonne. Malaysian palm oil stocks are expected to touch the super low level. The cost of importing soybean is pulled up by climbing US soybean prices. Moreover, domestic soybean oil stocks further dip to around 950,000 tonnes. Also, rapeseed oil and palm oil stockpiles are at low levels. Besides, cottonseed crushing mills reduce the operation rate. Hence, the overall bulk oils market will maintain an uptrend before the Lunar New Year. And short-term cottonseed oil market is projected to stay strong at the high level on the whole. Nevertheless, market participants had better keep a lookout of potential fluctuations in the wake of a surge in cottonseed oil price in the near term.

Sunflower oil: Sunflower oil prices steady with a partial rise of 100-200 CNY in China today. Grade I imported sunflower oil is offered at 10,300-10,800 CNY/tonne; crude sunoil is offered at 10,300-10,400 CNY/tonne.

Continuing sharp rises in U.S. soybean prices are lifting the cost for Chinese importers. China’s soybean oil stockpiles have further fallen to around 950,000 tonnes and some mills have sold out supplies for the first quarter, leading to tightening supplies in some spot markets. Meanwhile, its rapeseed oil and palm oil inventories are also low. The import cost of sunflower oil is climbing due to high prices in Ukraine, and sunflowerseed prices also keep increasing; hence, domestic millers have strong sentiment to support prices, which is bullish to the market. On the whole, sunflower oil prices will probably steady with a slight rise in the near term.

Corn oil: Corn oil prices are stable with a partial rise in China today. Grade I corn oil is offered at 10,000-10,400 CNY/tonne, up 50-100 CNY. (Shandong 10,200-10,450 CNY/tonne, up 50-100 CNY; 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 8,600; 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 may also be bullish to corn oil market. But corn oil is not price-competitive compared to other oils, and crude corn oil supply is affected by the pandemic in Hebei Province. These may add some bearish sentiment. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.47)