Today (Feb 4), 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. Besides, most of oil plants will halt the operation so as to take a holiday, and those operative factories mainly consume their stocks and resume the purchase after the Spring Festival. In this case, cottonseed trading is light in market. However, cottonseed production this year is lower than the previous year. And the lunar new year is approaching, with ginning factories in 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 rose on Monday as soybean supplies could be tightening in the U.S., soybean harvests were disrupted by more rains in Brazil, and soybean exports were affected by truck drivers’ strikes in Argentina. Oils futures fluctuate to adjust but stay above the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up partially by 20-30 CNY/tonne and palm oil partially fluctuates by 10-40 CNY/tonne. There are some low-level purchases, but the overall trade is not strong.

BMD palm oil plunged on Wednesday amid lower exports, but market participants expected a 13%-17% decline in Malaysia’s January palm oil production, so Dalian oils futures remain resilient today. Add to that, domestic oils supplies are not under pressure, crush margins are still negative on Dalian board, and Brazil’s soybean loading and shipment show a sign of delay in January and February. These positive fundamentals continue to lend good support to the oils market. But domestic soybean crush rose to 2.15 mln tonnes last week while the festival replenishment is completing. And investors are recouping funds ahead of the festival. Hence, the overall oils market may continue following futures to fluctuate frequently ahead of the Chinese New Year.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,320-8,670 CNY/tonne in domestic coastal areas, a partial rise of 20-30 CNY/tonne. (Tianjin traders 8320; Rizhao traders 8420; Zhangjiagang traders not available; and Guangzhou traders 8670). 

Palm oil: RBD palm olein is mainly priced at 7,020-7,050 CNY/tonne in coastal areas, partially fluctuating by 10-40 CNY/tonne. (Tianjin traders 7020-7050, down 10; Rizhao traders not available; Zhangjiagang traders 7030, flat; Guangzhou traders 7020, up 40; and Xiamen not available).

Rapeseed oil: U.S. soybean futures moved higher on Wednesday, but rapeseed oil futures continue falling on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 10 CNY at 10,040 -10,090 CNY/tonne in coastal regions in tepid trading.

Driven by ample feedstock and decent spot crush margins, soybean crush rose 2% to 2.15 mln tonnes last week and is forecast to stay high at 2.05 mln tonnes this week. While at the same time, the festival demand for edible oils is ending, and rapeseed oil stocks also build up to 168,000 tonnes in China. These combine to weigh down spot rapeseed oil prices. Rapeseed oil market will follow futures to decline and adjust in the short term, but stay high under the support of cost.

Cottonseed oil: Cottonseed oil prices keep steady today. 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 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 the net margins for futures have been negative, so the market is still underpinned by oils fundamentals. Plus, cottonseed crushing mills lower the operation rate. Accordingly, cottonseed oil market is predicted to keep range-bound at high levels.

Sunflower oil: Sunflower oil prices steady 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 is more expensive than corn oil in China now, so that most downstream buyers tend to choose the latter. Moreover, the festival demand is gradually fading and investors are recouping funds ahead of the new year, which are also 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 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 with a partial decline in China today. Grade I corn oil is offered at 10,200-11,200 CNY/tonne, down 100 CNY from yesterday. (Shandong 10,700-11,200, down100 CNY; Hebei not available; Liaoning 10,200; Sichuan not available); crude corn oil is offered at 8,800-9,000 CNY/tonne. (Hebei not available; 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 ¥6.46)