Today (Jan 27), 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 mixed with a fluctuation of 0.02 CNY/kg in some regions of 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 halted the operation for 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.

Oils: 

Summary: U.S. soybean futures continued bouncing on Tuesday on further tightening U.S. supplies due to a slow harvest in Brazil, and oils futures climb sharply on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 60-120 CNY/tonne and palm oil up 150-190 CNY, both in thin trade.

Oils prices move higher again as the market absorbs the bearish influence. And Malaysian palm oil is forecast to rebuild its stockpiles at a slower pace as the production is subject to floods and the pandemic. Meanwhile, China’s soybean oil stocks have fallen by 2.8% weekly to 810,000 tonnes and some regions are in tight supplies, for terminal consumers are taking delivery at a fair pace. And domestic rapeseed oil stocks also remain low. These are lending strong support to the oils market. But domestic soybean processors are working at high capacities due to decent margins for earlier imported soybean cargoes, so that they have raised the crush to more than 2 mln tonnes. Moreover, 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 run, oils market will follow futures to rise, but may also fluctuate frequently, so participants need to take care of such risks.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,500-8,820 CNY/tonne in domestic coastal areas, a rise of 60-120 CNY/tonne. (Tianjin traders 8500-8530; Rizhao traders 8600; Zhangjiagang traders not available; and Guangzhou traders 8820). 

Palm oil: RBD palm olein is mainly priced at 7,170-7,290 CNY/tonne in coastal areas, up 150-190 CNY/tonne. (Tianjin traders 7220-7240, up 150; Rizhao traders 7290, up 170; Zhangjiagang traders 7240, up 190; Guangzhou traders 7170-7190, up 150; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued bouncing on Tuesday as slow harvest progress in Brazilian crops extended the export window for U.S. soybeans and Brazilian truck drivers might hold a nationwide strike next week. Rapeseed oil futures are modestly higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 180 CNY at 10,510-10,710 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 millers are not bearing delivery pressure. Besides, 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. And a shipping agency reported that Malaysian palm oil exports narrowed down declines in the first 20 days of January. The overall bullish fundamentals are lending support to rapeseed oil market, so that the market may fluctuate and strengthen at the high level before the Spring Festival. 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 rise of 50-100 CNY/tonne today. U.S. soybean futures surged on Tuesday on tightening supplies as Brazilian soybean harvest slowed. Dalian oils futures stage wild gains today. In the cash market, soybean oil up by 60-120 CNY/tonne and palm oil up by 150-190 CNY/tonne. Soybean oil stocks further drop to 810,000 tonnes this week amid passable pace of deliveries taken by buyers. And palm oil stockpiles are at low levels likewise. These have together strongly buoyed oils market. Besides, cottonseed crushing mills lower the operation rate, which is bullish for market. But soyoil plants try to keep operating due to satisfactory crush margins for early arrived soybeans. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market. Therefore, cottonseed oil price may fluctuate at the high level in a short term.

Sunflower oil: Sunflower oil prices keep steady with a partial decline of 100-150 CNY in China today. Grade I imported sunflower oil is offered at 10,300-11,200 CNY/tonne, and crude sunoil is offered at 10,300-10,600 CNY/tonne.

As sunflower oil prices are higher than corn oil prices, a majority of downstream buyers have chosen the latter. 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 U.S. soybean futures continued bouncing on Tuesday on a tight supply prospect due to a slow harvest in Brazil. Oils futures also sharply climb on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil prices are also higher. And 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 ¥6.47)