Today (Feb 3), 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 keep 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, 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 continued falling as improving weather sped up soybean harvests in South America, in addition to dismal exports and technical retreat. Oils futures also extend a downtrend and post sharp losses on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 70-180 CNY/tonne and palm oil down 140-190 CNY/tonne, both in thin trade.

The recent COVID-19 aid plan by the U.S. government has shored up the market confidence in its economic recovery, and U.S. dollar is thus bouncing back from a low level, which is undermining the commodity market. Meanwhile, India has hiked import duty on crude palm oil, which weakens export competitiveness of producing countries. These are all weighing down 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 Brazil’s soybean loading and shipment show a sign of delay in January and February, and China’s monthly soybean arrivals may only be 6.2-6.4 mln tonnes in February and March, in addition that crush margins are at loss on Dalian. These fundamentals will help limit downside space in oils market. As Dalian futures are in correction territory, buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,400-8,630 CNY/tonne in domestic coastal areas, a decline of 70-80 CNY/tonne. (Tianjin traders 8460; Rizhao traders 8400; Zhangjiagang traders not available; and Guangzhou traders 8630). 

Palm oil: RBD palm olein is mainly priced at 6,980-7,060 CNY/tonne in coastal areas, down 140-190 CNY/tonne. (Tianjin traders 7060, down 140; Rizhao traders not available; Zhangjiagang traders 7060, down 140; Guangzhou traders 6980-7000, down 190; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed lower on Tuesday, and rapeseed oil futures continued sharp losses on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 210 CNY at 10,020-10,070 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. These continue weighing down spot prices. 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 100 CNY/tonne today. U.S. soybean futures further fell on Tuesday as the improved weather condition in South America escalated soybean harvest and due to poor export sales and technical decline. Oils futures also extend losses on Dalian Commodity Exchange. In the spot market, soybean oil drops by 70-180 CNY/tonne and palm oil falls by 140-190 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 short-term spot prices may fall back as the stockpiling before the holiday comes closer to an end. In addition, cottonseed oil is in subdued trade attributed to sluggish demand in market, weighing on its prices. Nevertheless, there is no pressure from oils supplies in domestic market. And cottonseed crushing mills lower the operation rate. Accordingly, cottonseed oil market is predicted to edge down in a short term but maintain high levels on the whole.

Sunflower oil: Sunflower oil prices steady with a partial decline of 100 CNY/tonne in China today. Grade I imported sunflower oil is offered at 10,300-11,150 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 continued declining in overnight trading on dismal export and technical retreat, and Dalian oils futures also extend a downtrend and post big loss today. Spot soybean oil and palm oil both decline, which is negative to sunflower oil market. But global vegetable oils prices are rising on concerns over a decline in soybean production in South America. And lower sunflower seed 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 with a partial decline in China today. Grade I corn oil is offered at 10,200-11,000 CNY/tonne, down 300 CNY from yesterday. (Shandong 10,800-11,200; Hebei not available; Liaoning 10,200; Sichuan not available); crude corn oil is offered at 8,650-9,000 CNY/tonne. (Hebei 9,000; Henan 8,800; Inner Mongolia 9,000).

Corn germ prices have been falling recently, and the shipment is slow as logistics are affected by the pandemic in northern China. There are very few buyers in corn oil market now albeit high prices. These are cracking down the market. But 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. Overall, corn oil market in China is predicted to keep strengthening at the high level.

(USD $1=CNY ¥6.47)