Today (Jan 14), 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 partly 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 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 fell on Wednesday on profit-taking, and oils futures sharply decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go down 100-150 CNY/tonne, both in thin trade.

Malaysian palm oil exports are disappointing in January, while its government leaves export duties for crude palm oil at 8% in February, in addition to concerns over the demand under the coronavirus pandemic, so BMD palm oil futures are under pressure. Moreover, domestic investors are going long meals and short oils, and the market has been in slow shipment since logistics are affected by the pandemic in northern regions. These are bearish to oils prices. But high U.S. soybean prices make net crushing margins for imported U.S. soybean on Dalian suffer sustained loss. Chinese soybean processors were keeping the crush at low levels in the past two weeks, so that soybean oil stocks have fallen to about 880,000 tonnes. And domestic rapeseed oil and palm oil stocks are also low. The oils market is predicted to follow futures to fluctuate frequently to adjust in the short term, but to maintain a relatively strong pattern ahead of the Chinese Lunar New Year.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,580-8,880 CNY/tonne in domestic coastal areas, a decline of 100-150 CNY/tonne. (Tianjin traders 8580-8630; Rizhao traders 8680; Zhangjiagang traders not available; and Guangzhou traders 8880). 

Palm oil: RBD palm olein is mainly priced at 7,330-7,410 CNY/tonne in coastal areas, down 110-130 CNY/tonne. (Tianjin traders 7390-7410, down 110; Rizhao traders not available; Zhangjiagang traders 7330, down 130; Guangzhou traders 7340, down 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Wednesday on profit-taking, and BMD palm oil futures also closed lower on concerns over export demand as Malaysian government maintained palm oil export duties at 8% in February. Rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 120-130 CNY at 10,540-10,670 CNY/tonne in coastal regions in tepid trading.

Chinese soybean processors will probably pick up the crush again under ample soybean stocks, 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. But domestic oils market is in small supply since soybean oil stocks have fallen further to 884,000 tonnes and rapeseed oil stocks are only 161,000 tonnes in coastal regions, and mid-and-downstream buyers will continue stocking up for the Spring Festival. Overall, rapeseed oil market is predicted to have limited downside space in the short run and to keep relatively strong at high levels ahead of the festival.

Cottonseed oil: Cottonseed oil prices stay stable in China today. CBOT soybean futures pare gains overnight on profit taking. Bulk oils also fall by 100-150 CNY/tonne. Cottonseed oil shifts to stabilize after a rise. Net crush margins for soybean futures have been negative as the import cost is pulled up in China by climbing US soybean prices. Moreover, domestic soybean crush has stayed at low levels for a second straight week, and soybean oil stocks further dip to around 880,000 tonnes. Also, rapeseed oil and palm oil stockpiles are at low levels. In this case, oils supply is limited in domestic market. Hence, the overall bulk oils market will maintain an uptrend before the Lunar New Year based on supportive fundamentals. Spot cottonseed oil is in short supply as crushing mills lower the operation rate. Hence, cottonseed oil market will still stay strong at the high level on the whole.

Sunflower oil: Sunflower oil prices steady with a partial rise of 100-300 CNY in China today. Grade I imported sunflower oil is offered at 10,500-11,200 CNY/tonne; crude sunoil is offered at 10,300-10,400 CNY/tonne.

high U.S. soybean prices make net crushing margins for imported U.S. soybean on Dalian suffer sustained loss. Chinese soybean processors were keeping the crush at low levels in the past two weeks, so that soybean oil stocks have fallen to about 880,000 tonnes. And domestic rapeseed oil and palm oil stocks are also low. The overall oils market is now in small supply, while mid-to-downstream buyers wil have demand ahead of the Lunar New Year. In sunflower oil market, import cost has been lifted by high prices in Ukraine, and feedstock sunflowerseed prices also keep rising, so domestic millers have strong sentiment to support prices, which is bullish to sunflower oil market. But the oils market is in slow shipment as logistics are affected by the coronavirus pandemic in northern China, which is also bearish to the market. In the short term, domestic sunflower oil prices are likely to fluctuate with a strengthening trend.

Corn oil: Corn oil prices are mostly stable and some rising in China today. Grade I corn oil is offered at 10,200-10,500 CNY/tonne. (Shandong 10,500 CNY/tonne; Hebei not available; Liaoning 10,200; Sichuan not available); crude corn oil is offered at 8,650-8,900 CNY/tonne, a rise of 50-200 CNY from yesterday. (Hebei 8,800-9,000; Henan 8,650, up 50 CNY; Inner Mongolia 9,000, 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 downstream buyers have strong sentiment to stay on the sidelines at current high corn prices, and oils shipments are slow now under the coronavirus pandemic in northern regions. These may add some bearish sentiment. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.47)