Today (Jan 22), 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 stay stable in China today. 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. However, cottonseed production 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, supporting cottonseed market. It is expected that cottonseed price will stand firm at the high level in the near term.

Oils: 

Summary: U.S. soybean futures bounced on brisk demand on Thursday but closed well below the intraday high. On China’s Dalian Commodity Exchange today, oils futures fluctuate to decline, and spot soybean oil and palm oil mostly go down 50-120 CNY/tonne, both in thin trade..

Chicago soybean futures plunge below the key support of 1,350 cents on Friday, as several agencies revised up their forecast for Brazilian soybean production. And China’s weekly soybean crush is expected to break 2 mln tonnes in the next two weeks, and domestic investors want to recoup fund before the Lunar New Year. Hence, Dalian oils futures are trapped in the correction territory. However, market participants worry that floods in Southeast Asia could impact palm oil production, and Malaysian palm oil stocks will not resume in the short term under lower output albeit a decline in exports. Furthermore, domestic soybean oil remains in tight supply and the overall stocks may continue declining to 800,00 tonnes ahead of the festival, and domestic rapeseed oil stockpiles are also low, so oil millers bear no pressure in shipment. Mid-to-long-term oils market is likely to keep a strong pattern on bullish fundamentals, but will probably fail to continue rallying without any speculation on weather in South America. The market will continue following futures to fluctuate frequently to adjust, and as Dalian futures are volatile, buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,330-8,750 CNY/tonne in domestic coastal areas, partially down 50-110 CNY/tonne. (Tianjin traders 8330-8350; Rizhao traders 8400; Zhangjiagang traders not available; and Guangzhou traders 8750). 

Palm oil: RBD palm olein is mainly priced at 6,950-7,070 CNY/tonne in coastal areas, mostly down 60-120 CNY/tonne. (Tianjin traders 7070, down 60; Rizhao traders 7070, down 110; Zhangjiagang traders 6990, down 120; Guangzhou traders 6950-6970, down 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Thursday but closed well below from the intraday high. Rapeseed oil futures move lower after high opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 30-60 CNY at 10,440-10,620 CNY/tonne in coastal regions in tepid trading.

Huge soybean arrivals at ports keep the product in ample supply in China and its crushing margins are handsome now, in addition to tightening soybean meal supply in northern regions, so weekly soybean crush is expected to break 2 mln tonnes in the next two weeks. Besides, rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil. But rapeseed oil stocks have declined to 143,000 tonnes and soybean oil further to 848,000 tonnes, so domestic millers are not under shipment pressure. The overall fundamentals are still bullish. For a lack of fresh and substantial bullish factors, rapeseed oil market will follow futures to remain choppy in the short run and stay at the high level on the whole.

Cottonseed oil: Cottonseed oil prices keep steady with a partial increase of 100 CNY/tonne today. Malaysian palm oil stocks will not easily pick up in the near term due to lower production, despite a steep decline in recent exports. Domestic soybean oil supply is still tight at the moment, and nationwide stocks will probably further drop to 800,000 tonnes before the Chinese New Year. Likewise, rapeseed oil stockpiles are at low levels. And cottonseed crushing mills also lower the operation rate. With many supportive factors on the fundamentals, cottonseed oil market is boosted. But oils futures fluctuate to fall on Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil mostly decrease by 50-120 CNY/tonne. Besides, downstream buyers are cautious in purchasing cottonseed oil due to sluggish demand in market after a price hike, leading to a subdued trade. Therefore, cottonseed oil market may move with fluctuations in a short term and maintain the high level on the whole.

Sunflower oil: Sunflower oil prices are stable in China today. Grade I imported sunflower oil is offered at 10,450-11,300 CNY/tonne, and crude sunoil is offered at 10,400-10,500 CNY/tonne.

As sunflower oil is more expensive than its rival corn oil, a majority of downstream buyers choose the latter. Chicago soybean futures bounced on brisk demand on Thursday but closed well below the intraday high, and Dalian oils futures fluctuate to decline today. Spot soybean oil and RBD palm olein prices are mostly lower, which is also negative to sunflower oil market. However, domestic soybean oil is still in tight supply and stocks may decline to 800,000 tonnes before the Lunar New Year, and domestic rapeseed oil stocks also remain low. Meanwhile, Sunflower oil import cost has been lifted by high prices in Ukraine, so Chinese manufacturers have strong sentiment to prop up prices. These are bullish to sunflower oil market. On the whole, sunflower oil prices in China may fluctuate to adjust at the high level in the near term.

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 8,700; Inner Mongolia 9,000).

Feedstock corn germ prices remain high, and some enterprises are still stocking up for the festival, so some sellers have sentiment to prop up prices. This is bullish to corn oil market. But downstream buyers tend to stay on the sidelines as corn oil prices have risen to high levels. Besides, the market shipment is slow as logistics are affected by the pandemic in northern China. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.46)