Today is 09/22/2023

Daily Review on Markets for Oilseeds and Oils in China--1/25/2021


Today (Jan 25), the market for oilseeds and oils in China is shown as follows:




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 with a partial decrease of 0.02-0.04 CNY/kg 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. Accordingly, traders who have stocks in hand look bullish on after-market, supporting cottonseed market. It is expected that cottonseed price will fluctuate at the high level in the near term as oils and meals retreat.




Summary: U.S. soybean futures closed 58.5 cents lower at 1311.75 cents last Friday on beneficial rains in South America, a stronger U.S. dollar and also profit-taking. Oils futures decline on China’s Dalian Commodity Exchange today, of which palm olein actually stays above the previous close. In the spot markets, soybean oil goes down 50-100 CNY/tonne and palm oil partially goes up 20-30 CNY/tonne, both in thin trade.


The steep loss in U.S. soybeans has stirred up market panic. And Chinese soybean processors are active due to decent crush margins for earlier imported cargoes and as downstream buyers are taking delivery at a brisk pace, and soybean crush rose 6.3% to 2.1 mln tonnes in the week as of Jan 22. Investors grow more sensitive about risks with the approaching of the Chinese Lunar New Year. But domestic soybean oil stocks further reduce 3.8% to 810,000 tonnes this week as terminal buyers are taking delivery briskly, with some regions still in tight supplies, and rapeseed oil stocks also remain low; hence, oil mills are no under shipment pressure now. The oils market still has some support at the bottom. As U.S. soybean futures still have some downside potential, short-term spot oils market is predicted to follow futures to adjust, and buyers can wait for low and stable prices to make appropriate replenishment.


Soybean oil: GB Grade I soybean oil is mainly priced at 8,290-8,690 CNY/tonne in domestic coastal areas, a decline of 50-100 CNY/tonne. (Tianjin traders 8290; Rizhao traders 8400; Zhangjiagang traders not available; and Guangzhou traders 8670-8690). 


Palm oil: RBD palm olein is mainly priced at 6,970-7,070 CNY/tonne in coastal areas, mostly up 20-30 CNY/tonne. (Tianjin traders 7070, flat; Rizhao traders not available; Zhangjiagang traders 7020, up 30; Guangzhou traders 6970, up 20; and Xiamen not available).


Rapeseed oil: U.S. soybean futures slumped last Friday, and rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 40 CNY at 10,400-10,580 CNY/tonne in coastal regions in tepid trading.


China’s soybean crush rose 6.3% to 2.1 mln tonnes last week on huge imports and ample supplies. And rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil in China. But domestic rapeseed oil stocks are only 143,000 tonnes at present, 48.6% lower than a year earlier. And domestic soybean oil stockpiles have also fallen 3.8% weekly to 810,000 tonnes. Therefore, the overall fundamentals are still bullish in the oils market. But due to a lack of fresh and substantial bullish cues, short-term rapeseed oil market will follow futures to fluctuate and adjust and remain high overall.


Cottonseed oil: Cottonseed oil prices keep steady with a partial decrease of 50-200 CNY/tonne today. CBOT soybean futures tumbled on Friday on strengthening US dollar, profit taking as well as favorable rainfall in South America. Oils are lower on Dalian Commodity Exchange today, and spot soybean oil also declines by 50-100 CNY/tonne. Market’s panic accelerated as U.S. soybeans take a nose dive. Besides, soyoil plants try to keep operating due to satisfactory crush margins for early arrived soybeans and fair delivery pace by downstream buyers. Soybean crush has increased by 6.3% to 2.1 mln tonnes. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market. However, nationwide soybean oil stocks have further dropped to 810,000 tonnes. 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. Therefore, cottonseed oil market may continue the declines in a short term but still maintain the high level on the whole.


Sunflower oil: Sunflower oil prices are mostly stable and some mixed in China today. Grade I imported sunflower oil is offered at 10,400-11,300 CNY/tonne, and crude sunoil is offered at 10,300-10,800 CNY/tonne.


Domestic soybean oil stocks further reduce 3.8% to 810,000 tonnes this week as terminal buyers are taking delivery briskly, with some regions still in tight supplies, and rapeseed oil stocks also remain low; hence, oil mills are no under shipment pressure now. And sunflower oil import cost has been lifted by high prices in Ukraine, so Chinese manufacturers have strong sentiment to prop up prices. But a majority of downstream buyers choose corn oil to replace sunflower oil due to its lower prices. Besides, oils futures fall on Dalian today, and spot soybean oil prices also decline, which is bearish 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).


Corn oil cost remains high due to expensive feedstock corn germ prices at present, so that millers have strong sentiment to support prices. And millers are mainly carrying out contracts now as buyers have been stocking up oil previously. 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. In addition, buyers have almost completed replenishment for the festival. These maybe bearish to corn oil market. Overall, corn oil market in China is predicted to keep strengthening.


(USD $1=CNY ¥6.48)