Today (Feb 2), 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 fluctuation of 0.02-0.04 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, 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: U.S. soybean futures fell on Monday on profit-taking and dismal exports, and oils futures continue declining on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 10-110 CNY/tonne and palm oil down 10-30 CNY/tonne, both in thin trade.

Indian government cut the basic import tax on crude palm oil to 15% from 27.5%, but imposed a 17.5% cess. Funds in domestic markets are leaving with the approaching of lunar new year, pressuring on Dalian futures. And last week, China’s soybean crush rose 2% to 2.15 mln tonnes, whilst buyers have almost completed festival replenishment, so that spot oils prices continue falling. But domestic oils supplies are not under pressure. And soybean loading and shipment show a sign of delay in January and February, and high U.S. soybean prices also keep crush margins on Dalian at loss. The overall oils market is predicted to only have small downside space and fluctuate frequently ahead of the Lunar New Year.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,470-8,820 CNY/tonne in domestic coastal areas, a decline of 10-110 CNY/tonne. (Tianjin traders 8470; Rizhao traders 8520; Zhangjiagang traders not available; and Guangzhou traders 8770-8820). 

Palm oil: RBD palm olein is mainly priced at 7,170-7,270 CNY/tonne in coastal areas, down 10-30 CNY/tonne. (Tianjin traders 7200, down 20; Rizhao traders 7270, down 30; Zhangjiagang traders 7200, down 30; Guangzhou traders 7170, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Monday as investors dumped to close positions after booking profits and on dismal exports. Rapeseed oil futures continue falling on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 30 CNY at 10,290-10,340 CNY/tonne in coastal regions in tepid trading.

China’s soybean crush rose 2% to 2.15 mln tonnes last week on ample stocks and decent crushing margins. And rapeseed oil is seeing its consumption affected by its big price spread with soybean oil and palm oil in China. In addition, the festival replenishment for edible oils is drawing to a close toward the end of the lunar year, so rapeseed oil stocks rose to 168,000 tonnes last week. Rapeseed oil market is predicted to follow futures to decline and adjust in the short term, but to stay high under the support of cost.

Cottonseed oil: Cottonseed oil prices keep steady with a partial decline of 50 CNY/tonne today. U.S. soybean futures closed down on Monday on profit taking and poor export data. Oils futures continue the declines on Dalian Commodity Exchange. In the spot market, soybean oil drops by 10-110 CNY/tonne and palm oil falls by 10-30 CNY/tonne. With the Spring Festival coming soon, investors successively withdraw their funds, pressuring futures. Besides, soybean crush gets back to 2.15 mln tonnes with a weekly rise of 2%. But spot prices fall back on the almost completed stockpiling before the holiday. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market. Nevertheless, there is no pressure from oils supplies in domestic market. And cottonseed crushing mills lower the operation rate. Accordingly, cottonseed oil price will not slip too much in a short term and may keep range-bound at high levels on the whole.

Sunflower oil: Sunflower oil prices steady 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. CBOT soybean futures fell in overnight trading on profit-taking and dismal exports, and Dalian oils futures continue declining today. Spot soybean oil and palm oil prices both drop in China, which is adding bearish sentiment to sunflower oil market. But 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 at the high level.

(USD $1=CNY ¥6.47)