Today (Feb 22), 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 0.01-0.06 CNY/kg higher in some regions today. Cottonseed crushing mills keep facing losses as cottonseed price remains too high. Besides, a few operative factories mainly consume their stocks now. 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 are mostly shut down, 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 last Friday, and oils futures open high to post wide gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil prices follow to climb 30-220 CNY/tonne higher from Saturday, and palm oil goes up 100-110 CNY/tonne from last Friday. The overall trade remains thin as buyers remain cautious in chasing after high prices.

Malaysian palm oil exports rose 15% on month in the first 20 days of February, data from ITS showed. China’s soybean oil stocks rose 4.4% from that before the Spring Festival to 870,000 tonnes due to sluggish shipments during the holidays, albeit a sharp drop in soybean crush. But domestic soybean oil supply is not a pressure, and palm oil and rapeseed oil stocks are also not huge. Meanwhile, subject to 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. Besides, the US dollar will probably remain weak under Biden administration’s $1.9 trillion stimulus package. The capital injection will remain active in the context of high macro-liquidity. High commodity prices globally will also help China’s oils market stay strong. The overall oils market is predicted to keep a strong trend in China. But as South American soybeans flood into the market and Malaysian palm oil production keep increasing seasonally, it is necessary to avoid risks of technical fluctuation and correction in the short term after oils prices rush higher.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,180-9,600 CNY/tonne in domestic coastal areas, a rise of 30-220 CNY/tonne from Saturday. (Tianjin traders 9180; Rizhao traders 9300; Zhangjiagang traders 9360-9400; and Guangzhou traders 9600). 

Palm oil: RBD palm olein is mainly priced at 7,850-7,950 CNY/tonne in coastal areas, up 100-110 CNY/tonne from last Friday. (Tianjin traders 7850, up 110; Rizhao traders 7950, up 110; Zhangjiagang traders 7900, up 100; Guangzhou traders 7900, up 100; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher last Friday, and oils futures also open high to advance on China’s commodity exchanges. Oil millers and traders are mostly not offering today. Spot rapeseed oil prices settle up 10-40 CNY at 10,830-10,880 CNY/tonne in coastal regions in tepid trading. 

The oils supplies in China are not weighing on the market now, and rapeseed oil stocks have risen to 224,000 tonnes but are still 25% lower than a year earlier. 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. A weak U.S. dollar will probably be commonly seen as the U.S. introduces quantitative easing monetary policy, so stronger 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 sharply increase by 100-500 CNY/onne in some regions of China today. U.S. soybean futures finished higher on Friday. Oils futures open high and post wild gains today on Dalian Commodity Exchange likewise. In the cash market, soybean oil jumps 30-220 CNY/tonne from last Saturday and palm oil represents an increase of 100-110 CNY/tonne from last Friday. For the moment, domestic spot stocks of 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, so the buying and selling in market are tepid now. Following the strength on bulk oils, short-term cottonseed oil market is predicted to maintain the strong uptrend.

Sunflower oil: Sunflower oil prices are mostly higher by 100-850 CNY in China today. Grade I imported sunflower oil is offered at 11,000-11,800 CNY/tonne, and crude sunoil is offered at 10,700-10,900 CNY/tonne.

US soybean futures rose last Friday, and oils futures open high to post wide gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil prices follow to climb 30-220 CNY/tonne higher from Saturday, and palm oil goes up 100-110 CNY/tonne from last Friday. Domestic palm oil and rapeseed oil stocks are also not huge. And subject to 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. Short-term commodity market is predicted to keep a strong trend. 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. In the near term, sunflower oil prices in China may continue to keep strengthening.

Corn oil: Corn oil prices are mostly not available in China today. Grade I corn oil price is 10,200-10,500 CNY/tonne (Shandong 10,500 CNY and Liaoning 10,200 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 operation rates in domestic mills remain low amid strong festival sentiment, so the supply is also small and processors have strong sentiment to support prices. Overall, short-term corn oil market is predicted to keep steady in China.

(USD $1=CNY ¥6.46)