Today (Feb 5), 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 and decrease by 0.02 CNY/kg in several regions of 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 ginning factories in Xinjiang successively suspend processing as the lunar new year is approaching, so 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 Thursday, as the market was expecting the USDA to continue lowering down U.S. soybean ending-stocks in supply and demand report due next Tuesday. Oils futures fluctuate to move higher on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 40-120 CNY/tonne and palm oil up 70-100 CNY/tonne, both in thin trade,

The market is speeding up to make purchases and transfer stocks ahead of a sharp rise in export duties of Indonesian palm oil products, thus leading to a consecutive decline in ending-stocks for both November and December in this country. This is shoring up Dalian futures. Deliveries of oils are not a burden in China’s market at present, and soybean loading shows a sign of delay in January and February in Brazil. Besides, crush margins for imported soybeans are negative on Dalian. These are all bullish to spot oils prices. However, China’s processors still maintain weekly soybean crush high at more than 2 mln tonnes, while the replenishment for the festival is coming to an end. Moreover, domestic investors are recouping funds for the festival. Therefore, it is less possible that oils market will extend sharp rises ahead of the festival. The overall oils market may continue fluctuating in the wake of futures, and fluctuate to strengthen in the mid-to-long term.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,450-8,820 CNY/tonne in domestic coastal areas, a rise of 40-120 CNY/tonne. (Tianjin traders 8450; Rizhao traders 8510; Zhangjiagang traders 8670; and Guangzhou traders 8800-8820). 

Palm oil: RBD palm olein is mainly priced at 7,150-7,180 CNY/tonne in coastal areas, up 70-100 CNY/tonne. (Tianjin traders 7150-7180, up 70; Rizhao traders not available; Zhangjiagang traders 7160, up 70; Guangzhou traders 7150, up 100; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Thursday, and rapeseed oil futures rise after high opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 160 CNY at 10,260-10,310 CNY/tonne in coastal regions in tepid trading. 

China’s rapeseed oil stocks remain low, and soybean oil stocks have reduced to 800,000 tonnes, so oils shipments are not under pressure. Besides, net crush margins for imported soybeans are negative on Dalian. These bullish fundamentals continue bringing support to rapeseed oil market, and the market may fluctuate to strengthen at high levels ahead of the Lunar New Year. But investors are recouping funds due to the festival, and the consumption of rapeseed oil is also affected by its huge price spread with soybean oil and palm oil, so rapeseed oil market may still fluctuate frequently.

Cottonseed oil: Cottonseed oil prices keep steady today. With the Chinese New Year coming soon, soybean crush still stays above 2 mln tonnes for the moment. But the stockpiling before the holiday comes closer to an end. Besides, 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.

U.S. soybean futures rose on Thursday, as the market was expecting the USDA to continue lowering down U.S. soybean ending-stocks in supply and demand report due next Tuesday. Dalian oils futures fluctuate to move high, and spot soybean oil and palm olein prices both climb. In addition, sunflower oil import cost has been lifted as the reduction in Ukrainian sunflowerseed production has pushed higher prices. But 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. In the near term, sunflower oil prices in China may keep steady ahead of the Lunar New Year.

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 10,600-11,200, down 100 CNY; Hebei not available; Liaoning 10,200; Sichuan not available); crude corn oil is offered at 8,800-9,000 CNY/tonne. (Hebei 9,000; Henan not available; 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. Corn oil market is quiet now as buyers are gradually on their way for Lunar Year holidays, which is also weighing down the price. 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)