Today (Jan 26), 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 with a partial rebound of 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, and oil plants in Xiajin, Shandong have halt the operation due to environmental protection. Hence, they 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.

Oils: 

Summary: U.S. soybean futures rallied on bargain-buying on Monday, and oils futures also move high on China’s Dalian Commodity Exchange today, of which palm olein futures actually stay below the previous close. In the spot markets, soybean oil goes up 20-130 CNY/tonne and palm oil fluctuates by 10-40 CNY/tonne, both in thin trade.

Malaysia’s largest palm oil producing state Sabah will not impose a shutdown on plantations, instead, it is going to test all workers in 30 days and to shut down those plantations where positive cases are found. The market is worried that the production could fail the forecast. Meanwhile, terminal deliveries of soybean oil in China is brisk, so that stocks have fallen further to 810,000 tonnes and some regions are facing tight supplies. And domestic rapeseed oil stocks also remain low. These are lending strong support to the oils market. However, U.S. soybean futures are still in a lack of material support and supported more by technical factors, and have declined on the CBOT today. Moreover, domestic soybean crushers are working at high capacities due to decent crushing margins for earlier imported soybean cargoes, with the crush volume rising 6.3% to 2.1 mln tonnes last week. Besides, funds have an unstable character toward the end of the lunar new year, which will also add to fluctuations in the market. In the short term, spot oils market is predicted to follow futures to fluctuate frequently.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,410-8,790 CNY/tonne in domestic coastal areas, a rise of 20-130 CNY/tonne. (Tianjin traders 8410-8430; Rizhao traders 8550; Zhangjiagang traders not available; and Guangzhou traders 8770-8790). 

Palm oil: RBD palm olein is mainly priced at 7,040-7,120 CNY/tonne in coastal areas, fluctuating by 10-40 CNY/tonne. (Tianjin traders 7090-7120, down 40; Rizhao traders not available; Zhangjiagang traders 7090, up 20; Guangzhou traders 7040-7060, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher on Monday, and rapeseed oil futures rise modestly on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 10-60 CNY at 10,460-10,640 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed oil stocks remain low and soybean oil stocks have fallen to 810,000 tonnes, so oil mills are no under shipment pressure. And shipping data showed that Malaysian palm oil exports have narrowed down declines in the first twenty days of January, which is also a bullish factor. Besides, weather in South America is still a threat on soybean production. Rapeseed oil prices follow Zhengzhou futures to rally today, and may fluctuate to strengthen at high levels before the Lunar New Year. But funds have has an unstable character before the festival, and rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil in China, so rapeseed oil market is likely to fluctuate frequently.

Cottonseed oil: Cottonseed oil prices keep steady with a partial decrease of 50-150 CNY/tonne today. Soybean futures pare gains today on CBOT due to lack of supportive factors. Soyoil plants try to keep operating due to satisfactory crush margins for early arrived soybeans. And soybean crush has increased by 6.3% to 2.1 mln tonnes. Besides, market will fluctuate more frequently amid high volatility in the year end. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market, cracking down cottonseed oil prices. However, U.S. soybean sharply rose on Monday underpinned by large buying upon low prices. Oils futures also stop falling and shift to go up. In the spot market, soybean oil up by 20-130 CNY/tonne. And soybean oil stocks further decline to 810,000 tonnes. Likewise, rapeseed oil stockpiles are at low levels. And cottonseed crushing mills also lower the operation rate, which is bullish for market. Therefore, cottonseed oil market may continue fluctuating to fall in a short term but still maintain the high level on the whole.

Sunflower oil: Sunflower oil prices keep steady and adjust in fluctuation in China today. Grade I imported sunflower oil is offered at 10,450-11,200 CNY/tonne, and crude sunoil is offered at 10,300-10,700 CNY/tonne.

As sunflower oil prices are higher than corn oil prices, a majority of downstream buyers have chosen the latter. In addition, CBOT soybean futures decline today for a lack of material bullish drivers. And domestic soybean processors are working at high operation rates due to decent crush margins for earlier imported soybean cargoes, with the crush volume rising 6.3% weekly to 2.1 mln tonnes last week. These are bearish to sunflower oil market. But sunflower oil import cost has been lifted by high prices in Ukraine, so Chinese manufacturers have strong sentiment to prop up prices. 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 market shipment is slow as logistics are affected by the pandemic in northern China. And buyers have almost completed replenishment for the festival. These may be bearish to corn oil market. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.48)