Today (Jan 15), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybeans are offered at 5,300-5,400 CNY/tonne at Shandong ports today. Port stocks total about 15,000 tonnes at Shandong ports now, and tight supply is strongly supporting the market sentiment, with some holders limiting shipment. 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. In the short term, imported soybean market is predicted to keep a strong trend on tight supply and high cost.

Cottonseed: Cottonseed prices are steady 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 cottonseed price will keep strengthening in the near term.

Oils: 

Summary: U.S. soybean futures rose sharply again on Thursday on dry weather in Argentina and strong U.S. soybean exports. Oils futures continue falling on previous settlement but stay above the previous close. In the spot markets, soybean oil partially fluctuates by 10-60 CNY/tonne and palm oil goes up 50-80 CNY/tonne, both in thin trade.

Malaysian palm oil production plunged up to 42% month over month in Jan 1-10, a bullish factor to the market. Meanwhile, Argentine transportation federation said they would start a strike on January 16 in order to hike freight rates at ports, and truck drivers in Brazil also threatened to strike on February 1. And net crush margins for U.S. soybeans have been at loss on Dalian due to strong U.S. soybean prices, and domestic soybean crush remained low the the past two weeks. China’s soybean oil stocks have fallen to about 880,000 tonnes, and rapeseed oil and palm oil stockpiles also remain low; hence, domestic oils market is also in small supply. And domestic buyers will also continue stocking up for the Lunar New Year. But soybean meal market has been in strong trade in the wake of sharp rises in price, so soybean crush will pick up greatly on easing meal inventory. And traders are going long meal and short oil, which is also pressuring the oils market. Overall, short-term oils market is predicted to follow futures to fluctuate frequently to adjust. Buyers can stay on the sidelines for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,560-8,910 CNY/tonne in domestic coastal areas, fluctuating by 10-60 CNY/tonne. (Tianjin traders 8560; Rizhao traders 8580; Zhangjiagang traders not available; and Guangzhou traders 8910). 

Palm oil: RBD palm olein is mainly priced at 7,270-7,340 CNY/tonne in coastal areas, up 50-80 CNY/tonne. (Tianjin traders 7340, up 80; Rizhao traders not available; Zhangjiagang traders 7290, up 50; Guangzhou traders 7270-7290, up 50; and Xiamen not available).

Rapeseed oil: U.S. soybean futures sharply rose on Thursday on strong exports, and rapeseed oil futures fluctuate to rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices  settle up 30 CNY at 10,570-10,700 CNY/tonne in coastal regions in tepid trading.

High U.S. soybean prices lead to sustained losses in net crush margins for imported U.S. soybeans on Dalian. China’s soybean oil stocks have fallen further to 884,000 tonnes, rapeseed oil stocks are only 161,000 tonnes in coastal regions, and palm oil stockpiles are also low; hence, the oils market is not under supply pressure. At the same time, mid-and-downstream buyers will still have demand ahead of the Lunar New Year. The overall rapeseed oil market is predicted to keep relatively strong at high levels. But funds have a character of instability 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. Zhengzhou futures are declining in afternoon session, so it is also necessary to prevent risks of short-term fluctuations.

Cottonseed oil: Cottonseed oil prices stay stable in China today. CBOT soybean futures soared on Thursday on strong export of U.S. soybean and prolonged dry conditions in Argentina. 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 supplies are limited in domestic market, offering support to 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. Nevertheless, downstream buyers are cautious now due to sluggish demand in market after a price hike, so cottonseed oil trading is tepid. It is expected that cottonseed oil price will tentatively stabilize in a short term. Market participants need to pay attention to the risk of fluctuations.

Sunflower oil: Sunflower oil prices are mostly stable and some mixed in China today. Grade I imported sunflower oil is offered at 10,500-11,000 CNY/tonne, and crude sunoil is offered at 10,300-10,400 CNY/tonne, partially fluctuating by 50-200 CNY/tonne.

Malaysian palm oil production plunged up to 42% month over month in Jan 1-10, a bullish factor to the market. China’s soybean oil stocks have fallen to about 880,000 tonnes, and rapeseed oil and palm oil stockpiles also remain low; hence, domestic oils market is also in small supply. And domestic buyers will also continue stocking up for 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 steady in China today. Grade I corn oil is offered at 10,200-10,500 CNY/tonne. (Shandong  not available; Hebei not available; Liaoning 10,200; Sichuan not available); crude corn oil is offered at 8,650-8,900 CNY/tonne. (Hebei 8,800-9,000; Henan 8,650; Inner Mongolia 9,000).

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 ¥6.46)