Today (Jan 29), 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 with a partial decline of 0.02 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 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 sank on Thursday on disappointing export data and profit-taking, but oils futures fluctuate to rise on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up partially by 20-110 CNY/tonne and palm oil up 70-80 CNY/tonne.

Indonesia officially set higher export tax and levy for crude palm oil in February, lending support to front palm oil contracts. And in China, soybean oil shipments remain brisk and inventories have fallen to about 800,000 tonnes. This is tightening soybean oil supply in some regions, so that northern traders are shipping to southern market. And domestic rapeseed oil stocks still stay low. These combine to bolster Dalian oils futures to regain. But Chinese importers are purchasing soybean oil and palm oil following improving import margins. And domestic processors are expected to keep weekly soybean crush high at over 2 mln tonnes for several straight weeks due to decent margins for earlier imported cargoes and under ample stocks. In addition, unstable fund toward the Spring Festival holidays is also adding swings to the market. U.S. soybean is in tight supply, Biden administration is rolling out a $1.9 trillion economic rescue package, and U.S. dollar still posts a weak trend. The overall oils market is predicted to keep strengthening with fluctuations, but also to follow futures to fluctuate repeatedly in the short term due to improving weather and harvest pressure in South America.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,620-8,920 CNY/tonne in domestic coastal areas, a partial rise of 20-110 CNY/tonne. (Tianjin traders 8620; Rizhao traders 8600; Zhangjiagang traders not available; and Guangzhou traders 8920). 

Palm oil: RBD palm olein is mainly priced at 7,260-7,390 CNY/tonne in coastal areas, up 70-80 CNY/tonne. (Tianjin traders 7310-7320, up 70; Rizhao traders 7390, up 70; Zhangjiagang traders 7320, up 80; Guangzhou traders 7260-7270, up 70; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell sharply on Thursday on disappointing export data and profit-taking, and rapeseed oil futures are moderately lower on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 60 CNY at 10,460-10,810 CNY/tonne in coastal regions in tepid trading.

Under adequate soybean supplies, Chinese processors are expected to keep the crush high at 2.1 mln tonnes and 2.05 mln tonnes in the next two weeks, respectively. And rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil in China. But 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. Rapeseed oil market will continue following futures to fluctuate repeatedly in the short run for a lack of fresh and practical bullish cues, and stay at the high level overall.

Cottonseed oil: Cottonseed oil prices keep steady today. U.S. soybean futures tumbled on Thursday on disappointing export data and profit taking. Oils futures seesaw to go up today on China’s Dalian Commodity Exchange. In the cash market, soybean oil partly increases by 20-110 CNY/tonne and palm oil jumps 70-80 CNY/tonne. With soybean oil trading well in domestic market, its stockpiles have declined to nearly 800,000 tonnes. And rapeseed oil stocks maintain a low level likewise. These have given a powerful boost to oils market. Besides, cottonseed crushing mills lower the operation rate, bulling cottonseed oil market. But soybean crush has topped 2 mln tonnes for few weeks in a row due to adequate supplies of soybean, increasing the volatility in market. 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 rise of 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.

Chicago soybean futures plunged on Thursday on disappointing export data and profit-taking. Dalian oils futures fluctuate to climb today, and spot soybean oil and palm oil also post rises. Besides, Ukraine this year harvested 13 mln tonnes of sunflower seed, compared to 16 mln tonnes last year. This reduction has led to a rise in feedstock cost, thus increasing the cost of importing sunflower oil. 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 ¥6.47)