Today (Feb 1), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Port soybean supply is relatively small and traders are limiting the shipment, so imported soybean is in tight supply in the market. Meanwhile, U.S. soybean prices stay at high levels on strong export demand and as Brazilian soybean harvest is postponed by rainfalls, so domestic soybean import cost also remains high. However, the market is in thin trade with the approaching of the Lunar New Year holidays, which is limiting the market. In the hybrid of the bull and the bear, imported soybean market may be little changed in the short term. Participants can keep an eye on imported soybean arrivals and demand in China.

Cottonseed: Cottonseed prices are steady with a partial decline of 0.1 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 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: USDA reported private sales of 132,000 tonnes of soybeans and 2.108 mln tonnes of corn to China. U.S. corn futures soared last Friday as China heavily bought a total of nearly 6 mln tonnes of U.S. corn that week. In addition, soybean harvest in Brazil could be delayed as the country was forecast to receive more rains. Hence, U.S. soybean futures sharply rose last Friday. But on China’s Dalian Commodity Exchange today, oils futures fluctuate to decline as funds are leaving with the approaching of the Lunar New Year. In the spot markets, soybean oil goes down partially and palm oil down 20-70 CNY/tonne. Mid-to-downstream traders are mostly heading home for festival holidays and buyers are cautious, so the trade remains thin.

China’s soybean crush rose 2% to 2.15 mln tonnes last week, and consumers have almost completed the festival replenishment, so soybean oil stocks did not see a sharp decline, which is bearish to the oils market. But domestic oils supplies are not under pressure. Meanwhile, Malaysian palm oil production is slow under the COVID-19 pandemic and floods, and Indonesia has officially set higher export tax and levy for crude palm oil in February. Besides, soybean loading and shipment show a sign of delay in January and February and U.S. soybean prices still remain high, so domestic millers are supporting the prices under high cost. In the hybrid of the bull and the bear, oils market is predicted to swing in the short term.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,530-8,930 CNY/tonne in domestic coastal areas, partially down 20-70 CNY/tonne. (Tianjin traders 8530; Rizhao traders 8600; Zhangjiagang traders not available; and Guangzhou traders 8880-8930). 

Palm oil: RBD palm olein is mainly priced at 7,190-7,310 CNY/tonne in coastal areas, down 50-60 CNY/tonne. (Tianjin traders 7240, down 50; Rizhao traders 7310, down 60; Zhangjiagang traders 7240, down 60; Guangzhou traders 7190-7210, down 50; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rallied last Friday, but rapeseed oil futures decline after low opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 90-120 CNY at 10,340-10,720 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush continued rising to 2.14 mln tonnes last week under ample soybean stocks, and rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil in China. Rapeseed oil stocks rose 17.24% to 168,000 tonnes in China last week, and funds are leaving the market with the approaching of the Lunar New Year. Rapeseed oil market is predicted to swing repeatedly in the short term, and to stay high under the support of cost.

Cottonseed oil: Cottonseed oil prices keep steady with a partial decline of 50 CNY/tonne today. Weather forecast indicates potential rainfall in Brazil, which could delay soybean harvest. China booked its biggest purchase of U.S. soybean and corn. CBOT soybean futures soared on Friday. But oils futures seesaw to pare gains today on China’s Dalian Commodity Exchange due to capital outflow with the upcoming Spring Festival. In the cash market, soybean oil and palm oil fall by 20-70 CNY/tonne. Besides, soybean oil stocks have no more drastic decline as buyers are about to end the stockpiling before the holiday, weighing on oils market. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market. Nevertheless, U.S. soybeans keep strengthening, and there is no pressure from oils supplies in domestic market. And cottonseed crushing mills lower the operation rate. Therefore, cottonseed oil price may fluctuate at the high level in a short term.

Sunflower oil: Sunflower oil prices are steadily mixed by 50-100 CNY in China today. Grade I imported sunflower oil is offered at 10,400-11,150 CNY/tonne, and crude sunoil is offered at 10,300-10,500 CNY/tonne.

Sunflower oil prices are higher than corn oil prices, so a majority of downstream buyers have chosen the latter. And as funds are leaving with the approaching of the Spring Festival, Dalian oils futures are in correction territory today. Spot soybean oil goes down partially and palm oil down 20-70 CNY/tonne, which is bearish to sunflower oil market. Global vegetable oils prices are rising on concerns over a decline in soybean production in South America. And lower sunflowerseed production in Ukraine has further lifted the cost of sunflower oil. In the near term, sunflower oil prices may fluctuate to adjust at high levels 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).

The majority of millers are carrying out contracts as the trade has been strong and customers are taking delivery at a brisk pace, so spot stocks is getting tight. This is bullish to corn oil market. However, corn germ prices have been falling recently, and the shipment is slow as logistics are affected by the pandemic in northern China, which could be negative to the market. Overall, corn oil market in China is predicted to keep strengthening.

(USD $1=CNY ¥6.46)