Today (Jan 18), 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 fluctuate by 0.02-0.08 CNY/kg in portions of 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 fell last Friday on profit-taking and South America welcomed beneficial rains. Oils futures stay below the previous settlement but above the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil fluctuates by 50-140 CNY/tonne and palm oil up 30-70 CNY/tonne, both in thin trade.

China’s oil mills raised soybean crush by 18% to 1.98 mln tonnes last week on handsome crush margins for earlier imported soybean cargoes and as soybean meal inventory tightened in northern markets. And Malaysian palm oil exports fell 42% month on month in the first half of January, which also dents the market sentiment. But currently, soybean oil is still in tight supply in some regions of China, with nationwide stocks falling by 4% weekly to 848,000 tonnes. And domestic rapeseed oil and palm oil stockpiles are also low, so oil mills are not under pressure. Meanwhile, U.S. soybean prices are still at high levels. Hence, the oils market still has strong support at its bottom. The overall market is predicted to follow futures to fluctuate in the short run.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,450-8,900 CNY/tonne in domestic coastal areas, fluctuating by 50-140 CNY/tonne. (Tianjin traders 8450; Rizhao traders 8550; Zhangjiagang traders not available; and Guangzhou traders 8900). 

Palm oil: RBD palm olein is mainly priced at 7,120-7,230 CNY/tonne in coastal areas, up 30-70 CNY/tonne. (Tianjin traders 7230, up 40; Rizhao traders not available; Zhangjiagang traders 7130, up 30; Guangzhou traders7120-7130, up 40; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell last Friday on profit-taking and South America welcomed beneficial rains. Rapeseed oil futures fluctuate to rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices  settle up 20-30 CNY at 10,570-10,700 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed imports remain moderate, and oil millers thus keep the crush at a low level, so rapeseed oil stocks fell 12% weekly to 142,500 tonnes last week. Besides, China’s soybean oil and palm oil stockpiles are also low. Hence, there is no pressure in oils supplies. Meanwhile, mid-and-downstream buyers will continue stocking up for the Chinese Lunar New Year. Rapeseed oil market is predicted to fluctuate at the high level toward the strong side. 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, so the market will probably fluctuate frequently.

Cottonseed oil: Cottonseed oil prices stay stable with a partial decrease of 100-300 CNY/tonne in China today. CBOT soybean futures closed lower on Friday on profit taking and favorable rainfall in Argentina. Spot soybean oil fluctuates by 50-140 CNY/tonne. Downstream buyers are cautious in purchasing cottonseed oil now due to sluggish demand in market after a price hike, leading to a subdued trade. This has weighed on cottonseed oil price. However, domestic soybean oil supply is still tight currently in some regions, and soybean oil stocks further dip by 4% to 848,000 tonnes. Also, rapeseed oil and palm oil stockpiles are at low levels. Plus, the strength on US soybean prices has offered support to oils fundamentals. Cottonseed crushing mills also lower the operation rate. It is expected that the overall cottonseed oil market will stay strong at the high level. Market participants need to keep a lookout of the risk of frequent fluctuations.

Sunflower oil: Sunflower oil prices steadily fluctuate to adjust in China today. Grade I imported sunflower oil is offered at 10,500-11,200 CNY/tonne, and crude sunoil is offered at 10,400-10,500 CNY/tonne, partially fluctuating by 50-200 CNY/tonne from last Friday.

Soybean oil is still in tight supply in some regions of China, with nationwide stocks falling by 4% weekly to 848,000 tonnes. And domestic rapeseed oil and palm oil stockpiles are also low, so oil mills are not under pressure. Meanwhile, U.S. soybean prices are still at high levels, so the oils market still has strong support at its bottom. 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 10,200-11,000 CNY/tonne. (Shandong 11,000; Hebei not available; Liaoning 10,200; Sichuan 10,500); crude corn oil is offered at 8,650-9,200 CNY/tonne. (Hebei 9,000-9,200; 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 ¥6.48)