Today (Jan 11), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Some holders in China 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 and purchases by China. These together bolster port imported soybean prices to go strengthening. But soybean imports from the U.S. remain huge, so it is quite likely that imported soybean supply will further grow in domestic market. Supported by tight supplies and high import cost, short-term imported soybean market will likely keep a strong trend.

Cottonseed: Cottonseed prices further increase by 0.08-0.24 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 last Friday on concerns over weather in South America and on tighten global supplies as the USDA was expected to continue revising down U.S. soybean stocks in its report due Tuesday. Oils futures open high but fluctuate to decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially fluctuates by 40-90 CNY/tonne and palm oil down by 60-80 CNY/tonne, both in thin trade.

China’s soybean crush fell further by 1.4% to 1.68 mln tonnes last week, which could be attributed to the pandemic in northern China and soybean supply shortages. Domestic traders are going long in meal positions, weighing down oils futures. However, China’s soybean oil stocks fell 7.7% last week to 884,400 tonnes and rapeseed oil stockpiles also remain low, whilst demand has come as mid-and-downstream buyers are stocking up for the Chinese Lunar New Year. And December-end palm oil inventory in Malaysia are forecast to decline to a historical low of 1.20 mln tonnes and to continue the downtrend in coming two to three months; hence, tight supply is now supporting a strong trend in palm oil prices. Overall, the oils market is predicted to have limited downside space in the short term and to stay strong at high levels ahead of the Chinese Lunar New Year.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,790-9,040 CNY/tonne in domestic coastal areas, partially fluctuating by 40-90 CNY/tonne. (Tianjin traders 8790; Rizhao traders 8920; Zhangjiagang traders not available; and Guangzhou traders 9040). 

Palm oil: RBD palm olein is mainly priced at 7,540-7,570 CNY/tonne in coastal areas, mostly down 60-80 CNY/tonne. (Tianjin traders 7570, down 80; Rizhao traders not available; Zhangjiagang traders 7570, down 60; Guangzhou traders 7540-7560, down 80; and Xiamen not available).

Rapeseed oil: The USDA was expected to revise down 2020/21 U.S. soybean ending stocks from 175 mln bushels to 139 mln bushels in its monthly supply/demand report due this Tuesday. CBOT soybean futures thus rallied last Friday on a tightening global supply prospect and on concerns over weather in South America. Rapeseed oil futures stay below the previous close in spite of rises on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 50 CNY at 10,670-10,720 CNY/tonne in coastal regions in tepid trading.

The consumption of rapeseed oil in China may also be affected by its big price spread with soybean oil and palm oil at present. China’s rapeseed oil stocks rose 28.5% to 161,150 tonnes last week, dragging down the market itself. But domestic soybean oil stockpiles fell 7.7% to 880,000 tonnes last week and palm oil inventory is also low, and some mills have completed sales for the first quarter; hence, there is no supply pressure in oils market. Overall, rapeseed oil market is predicted to have little downside space and to maintain at high level.

Cottonseed oil: Cottonseed oil prices drastically increase by 100-400 CNY/tonne in China today. CBOT soybean futures skyrocketed last Friday on concerns over dry condition in South America and expected tightening supply of soybean worldwide. Oils futures go up on China’s Dalian Commodity Exchange in early trade. Malaysian palm oil stocks are expected to slip to the super low level. And the cost of importing soybean is pulled up in China by climbing US soybean prices. Moreover, domestic soybean oil stocks further dip to 884,400 tonnes. Also, rapeseed oil and palm oil stockpiles are at low levels. Besides, oils supply is limited in domestic market, and downstream buyers are still in need of stocking up before the Lunar New Year. Plus, 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.

Sunflower oil: Sunflower oil prices steady with a partial rise of 200-600 CNY in China today. Grade I imported sunflower oil is offered at 10,500-11,000 CNY/tonne; crude sunoil is offered at 10,300-10,400 CNY/tonne.

China’s soybean oil stocks fell 7.7% last week to 884,400 tonnes and rapeseed oil stockpiles also remain low, whilst demand has come as mid-and-downstream buyers are stocking up for the Chinese Lunar New Year. And December-end palm oil inventory in Malaysia are forecast to decline to a historical low of 1.20 mln tonnes and to continue the downtrend in coming two to three months; hence, tight supply is now supporting a strong trend in palm oil prices. 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 move higher in China today. Grade I corn oil is offered at 10,100-10,300 CNY/tonne, up 100 CNY from last Friday. (Shandong 10,300 CNY/tonne, up 100 CNY; Hebei not available; Liaoning 10,100, up 100 CNY; Sichuan 10,300); crude corn oil is offered at 8,600-8,800 CNY/tonne, up 200 CNY from last Friday. (Hebei not available; Henan 8,600; Inner Mongolia 8,800, up 200 CNY).

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 ¥6.48)