Today (Jan 28), 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 steady 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 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 stand firm at the high level in the near term.

Oils: 

Summary: U.S. soybean futures continued rising on Wednesday on a slow crop harvest in Brazil and concerns over a strike by Brazilian truck drivers on Feb 1. Oils futures also keep climbing on China’s Dalian Commodity Exchange today, but have notably slowed down gains.

Chinese buyers purchased two vessels of soybean oil for March shipments and 1 palm oil cargoes for April shipment yesterday, as import margins keep improving. Moreover, domestic processors also maintain soybean crush high at 2.05-2.1 mln tonnes. These are undermining the market confidence. But BMD palm oil has been well supported by short coverings ahead of the festival and as Malaysian palm oil is forecast to rebuild stocks at a slower pace under a decline in production. Meanwhile, China’s soybean oil stocks have fallen to about 800,000 tonnes, for terminal consumers are taking delivery at a fair pace. Some regions are still in tight supplies, so that northern traders are shipping soybean oil to southern markets. And domestic rapeseed oil stocks also remain low. The overall oils market is predicted to keep a strengthening trend. But due to frequent speculations on weather in South America and the unstable character of funds toward the end of the lunar year, short term spot oils market may follow futures to swing.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,580-8,880 CNY/tonne in domestic coastal areas, mostly up 10-80 CNY/tonne and a partial decline of 10 CNY/tonne. (Tianjin traders 8580; Rizhao traders 8700; Zhangjiagang traders not available; and Guangzhou traders 8830-8880). 

Palm oil: RBD palm olein is mainly priced at 7,210-7,340 CNY/tonne in coastal areas, fluctuating by 10-30 CNY/tonne. (Tianjin traders 7260-7290, down 10; Rizhao traders 7340, flat; Zhangjiagang traders 7290, up 30; Guangzhou traders 7210, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued rising on Wednesday on a slow crop harvest in Brazil and concerns over a strike by Brazilian truck drivers on Feb 1. Rapeseed oil futures extend gains but actually stay around the previous close on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices steady at 10,510-10,710 CNY/tonne in coastal regions in tepid trading.

China’s rapeseed oil stocks remain low at 143,000 tonnes at present, and soybean oil stockpiles have fallen to 810,000 tonnes, so oil millers are not under pressure in delivery. Meanwhile, soybean import cost stays stubbornly high. With support of bullish fundamentals, rapeseed oil market may strengthen at the high level with fluctuations ahead of 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 decline of 50 CNY/tonne today. Driven by continuous improvement in import margins, China’s importers bought 2 soybean oil vessels for shipment in March and 1 palm oil vessel for shipment in April yesterday. And soybean crush stays at 2.05-2.10 mln tonnes now. These have together depressed market confidence. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market, weighing on its price. Nevertheless, soybean oil stocks have slipped to nearly 800,000 tonnes amid passable pace of deliveries taken by buyers. And rapeseed oil stockpiles are at low levels likewise. Accordingly, the overall oils market is predicted to maintain a strong uptrend. Besides, cottonseed crushing mills lower the operation rate, so cottonseed oil price may fluctuate at the high level in a short term.

Sunflower oil: Sunflower oil prices keep steady with a partial rise of 100 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.

China’s soybean oil stocks have declined to about 800,000 tonnes, for terminal consumers are taking delivery at a fair pace. Some regions are still in tight supplies, so that northern traders are shipping soybean oil to southern markets. And domestic rapeseed oil stocks also remain low. In addition, sunflower oil import cost has been lifted by high prices in Ukraine, which is also bullish to the market. However, sunflower oil prices are higher than corn oil prices, so a majority of downstream buyers have chosen the latter. And downstream buyers have almost completed the replenishment and are slowing down the delivery. In the short run, sunflower oil prices may fluctuate to adjust in China.

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 8,650-9,000 CNY/tonne. (Hebei 9,000; 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. 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)