Today (Feb 20), 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 and partly steady 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 rose on Friday as the USDA projected US soybean supply to stay at a historical low amid overall strong demand, and oils futures also continued sharp gains in Friday’s after-hour trade on China’s Dalian Commodity Exchange. Oil millers are mostly not offering on Saturday today, and traders continue to hike offers. Spot soybean oil and palm oil go up 100-140 CNY/tonne, and the market is 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. And domestic oils supplies are not under pressure at present. US quantitative easing monetary policy is leading to a weak trend in US dollar, so that oils futures perform well in China’s commodity exchanges right after the festival. Short-term oils market is predicted to keep a relatively strong trend. But as South American soybeans flood into the market and Malaysian palm oil production keep increasing seasonally, domestic oils prices will face risks of fluctuation at the high level. It is necessary to avoid risks of fluctuations technically after prices rush higher early next week.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,150-9,600 CNY/tonne in domestic coastal areas, a rise of 100-140 CNY/tonne. (Tianjin traders 9150; Rizhao traders 9200; Zhangjiagang traders not available; and Guangzhou traders 9600). 

Palm oil: RBD palm olein is mainly priced at 7,900-7,950 CNY/tonne in coastal areas, up 100-110 CNY/tonne. (Tianjin traders 7900, up 100; Rizhao traders 7950, up 110; Zhangjiagang traders not available; Guangzhou traders not available; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher on Friday, and oils futures also rose broadly in Friday’s after-hour trade on China’s commodity exchanges, which are closed on Saturday today. Oil millers and traders are mostly not offering today.

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. A weak U.S. dollar will probably be commonly seen as the U.S. introduces quantitative easing monetary policy, so strengthening commodity market is also bullish to domestic oils. In the short run, rapeseed oil is predicted to strengthen at the high level.

Cottonseed oil: Cottonseed oil prices are mostly not available and partly a bit higher today. U.S. soybean futures finished higher last night. Oils futures on Dalian Commodity Exchange also surged in overnight trade. In the cash market, soybean oil and palm oil represent an increase of 100-140 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 mostly stable and some rising by 200 CNY in China today. Grade I imported sunflower oil is offered at 10,800-11,300 CNY/tonne, and crude sunoil is offered at 10,500-10,700 CNY/tonne.

US soybean futures rose on Friday as the USDA projected US soybean supply to stay at a historical low amid overall strong demand, and oils futures also continued sharp gains in Friday’s after-hour trade on China’s Dalian Commodity Exchange. Oil millers are mostly not offering on Saturday today, and traders continue to hike offers. Spot soybean oil and palm oil go up 100-140 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. But downstream buyers take a slow pace in deliveries and the market is in thin trade amid remained festival atmosphere, which are negative to the market. 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 10,500 CNY/tonne (Shandong 10,500 CNY); and crude corn oil is offered at 8,800 CNY/tonne (Henan 8,800).

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)