Today (Feb 19), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Domestic market trade has not returned to normal right after the lunar new year holidays, so purchases and sales are both poor, which is negative to imported soybean market. But port soybean supply is relatively small. And U.S. soybean prices are strong due to strong demand and as rainfalls delay soybean harvest in Brazil, so soybean import cost remains high in China. These are supporting imported soybean market. In a hybrid of the bull and the bear, short-term 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 in China are mostly not available today. Cottonseed crushing mills keep facing losses as cottonseed price remains too high. Besides, a majority of oil plants have not resume the operation yet, and a few operative factories mainly consume their stocks. 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, seeing limited availability for cottonseed in market. This has offered a support to cottonseed market. It is expected that cottonseed price will stay strong at the high level in the near term.

Oils: 

Summary: US soybean futures closed lower on Thursday on technical selling, after the USDA projected US soybean acreage in the 2021/22 at 90 mln acres, higher than the 83.1 mln acres in the previous year and also the average analysts' estimates of 89.4 mln acres. Malaysian palm oil futures fell nearly 4% on Thursday on concerns over lower demand, as Malaysia maintained export tax for palm oil at 8% and hiked reference price while India also raised crude palm oil import duty to 35.75%. On China’s Dalian Commodity Exchange today, oils futures declined in early trade, but later rebound to post notable gains. Spot oils prices also follow to climb, with soybean oil up 50-200 CNY/tonne and palm oil up 110-140 CNY/tonne. Spot markets are in thin trade as buyers remain cautious in chasing after high prices.

China’s stocks of three major oils, i.e. soybean oil, palm oil and rapeseed oil, are not huge at present. And following a delay in soybean harvest and shipment in Brazil, imported soybean arrivals at domestic ports are forecast to be only 6.2 mln tonnes monthly in February and March, which could also affect soybean crush in near term. Meanwhile, domestic mid-and-downstream buyers will have a wave of post-festival demand, so there is no pressure in oils supplies, and oil millers have strong sentiment to hike prices. Short-term oils market is predicted to keep a strong trend. But as South American soybeans flood into the market, Chinese processors pick up soybean crush and Malaysian palm oil production keep increasing seasonally, domestic oils prices may fluctuate at high levels. It is necessary to keep an eye on these factors.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,000-9,510 CNY/tonne in domestic coastal areas, a rise of 50-200 CNY/tonne. (Tianjin traders 9040-9060; Rizhao traders 9000; Zhangjiagang traders 9290; and Guangzhou traders 9490-9510). 

Palm oil: RBD palm olein is mainly priced at 7,760-7,840 CNY/tonne in coastal areas, up 110-140 CNY/tonne. (Tianjin traders 7760-7790, up 110; Rizhao traders not available; Zhangjiagang traders 7820, up 140; Guangzhou traders 7820-7840, up 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures continued falling on Thursday, but oils futures move higher after low opens on China’s commodity exchanges. Spot rapeseed oil prices settle up 20-50 CNY at 10,740-10,840 CNY/tonne in coastal regions in tepid trading. 

The overall oils supplies are under no pressure in China now. And imported soybean arrivals at domestic ports are forecast to be only 6.2 mln tonnes monthly in February and March, following a delay in soybean harvest and shipments in Brazil. Bullish fundamentals are also lending support to rapeseed oil market. In the short term, rapeseed oil market is predicted to strengthen at high levels, but the market may also fluctuate frequently as the consumption is affected by a big price spread with soybean oil and palm oil.

Cottonseed oil: Cottonseed oil prices are mainly not available today. In several regions, the prices are unchangeably offered. Oils futures on Dalian Commodity Exchange fall back in morning trade, but rebound afterwards and post distinct gains. In the cash market, soybean oil represents a rise of 50-200 CNY/tonne and palm oil increases by 110-140 CNY/tonne. For the moment, domestic spot stocks of three major oils including soybean oil, palm oil and rapeseed oil stay at a relatively low level. Moreover, soybean arrivals during the month of February and March could be only 6.2 mln tonne each month, which may affect the operation rates in crushing mills. Thus, short-term bulk oils market will maintain a strong uptrend. In addition to this, a majority of oil plants have yet to resume the operation, which is bullish for cottonseed oil. But being a kind of blending oil, the downstream demand for cottonseed oil is limited. And cottonseed oil buying and selling are tepid now with the enchanting smell of Spring Festivals holidays. It is expected that short-term cottonseed oil market will keep strengthening at the high level.

Sunflower oil: Sunflower oil prices are mixed in China today, partially fluctuating by 50-100 CNY. Grade I imported sunflower oil is offered at 10,600-11,300 CNY/tonne, and crude sunoil is offered at 10,500-10,700 CNY/tonne.

China’s stocks of three major oils, i.e. soybean oil, palm oil and rapeseed oil, are not huge at present. Dalian oils futures first fell in early trade, but then rebound to post sharp gains today, and spot soybean oil also goes up 50-200 CNY/tonne and palm oil up 110-140 CNY/tonne. In addition, sunflower oil import cost has been lifted as the reduction in Ukrainian sunflowerseed production has pushed higher prices. These are bolstering sunflower oil market. However, sunflower oil is more expensive than corn oil in China now, so that most downstream buyers tend to choose the latter. In the near term, sunflower oil prices in China may fluctuate to strengthen.

Corn oil: Corn oil prices are mostly not available in China today. Grade I corn oil price is not offered and crude corn oil is offered at 8,800 CNY/tonne in Henan Province.

Corn oil prices are not competitive compared to rival oils, in addition to limited demand, which is weighing down the market. But some domestic processor have not started operation amid strong festival sentiment, so spot corn oil stocks are still tight at present. Overall, short-term corn oil market is predicted to keep steady in China.

(USD $1=CNY ¥6.46)