Today (Feb 23), 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 offered and 0.02-0.06 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: U.S. soybean futures rose on Monday, as Brazil’s 2020/21 soybean harvest reached 15% as of Feb 18, well below the 31% in the previous year, to hit the lowest rate in the decade. On Dalian Commodity Exchange today, oils futures fluctuate to adjust in early trade but then quickly rally to expand gains in afternoon session. In the spot markets, soybean oil and palm oil go up 50-100 CNY/tonne in the morning.

SGS data showed that Malaysian palm oil exports rose 28.2% on month in the first 20 days of February, and MPOB reported that Malaysian oil palm planting area declined for the first time in history in 2020. Oil World projected Malaysian palm oil output to fall to a fresh five-low in 2020/21. 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, and global commodity markets will probably remain strong. In addition, although China’s soybean oil stocks have increased to 870,000 tonnes, there is still no pressure in supply and domestic palm oil and rapeseed oil stocks are also not huge. At the same time, 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. The overall fundamentals are bright. U.S. soybean futures expand gains on board in afternoon session, which is lending support to the cost side. Overall, oils market is predicted to keep a strong trend in China.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,290-9,660 CNY/tonne in domestic coastal areas, a rise of 50-100 CNY/tonne. (Tianjin traders 9290-9310; Rizhao traders 9350; Zhangjiagang traders 9410-9440; and Guangzhou traders 9610-9660). 

Palm oil: RBD palm olein is mainly priced at 7,940-8,010 CNY/tonne in coastal areas, up 80-100 CNY/tonne. (Tianjin traders 7940-7960, up 90; Rizhao traders 8010, up 80; Zhangjiagang traders 7960, up 100; Guangzhou traders 7950-7960, up 80; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher on Monday, and oils futures continue gains on China’s commodity exchanges today. Spot rapeseed oil prices settle up 10-40 CNY at 10,780-10,930 CNY/tonne in coastal regions in tepid trading.

China’s stocks of soybean oil and palm oil are not huge, so that the overall supplies are under no pressure. 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. 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. Oils futures are expanding gains in afternoon session today. Overall, short-term rapeseed oil market is predicted to strengthen at the high level.

Cottonseed oil: Cottonseed oil prices mostly stay stable and partly further increase by 100-200 CNY/onne in China today. U.S. soybean futures rose on Monday. Oils futures on Dalian Commodity Exchange seesaw in early trade, but rapidly climb afterwards and extend gains after noon. In the cash market, soybean oil and palm oil represent an increase of 50-100 CNY/tonne. For the moment, domestic palm oil and rapeseed oil stockpiles 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 and further gains on Dalian oil futures, short-term cottonseed oil market is predicted to maintain the strong uptrend.

Sunflower oil: Sunflower oil prices are mostly higher by 100-1000 CNY in China today. Grade I imported sunflower oil is offered at 11,300-12,000 CNY/tonne, and crude sunoil is offered at 11,500 CNY/tonne.

U.S. soybean futures rose on Monday, as Brazil’s 2020/21 soybean harvest reached 15% as of Feb 18, well below the 31% in the previous year, to hit the lowest rate in the decade. On Dalian Commodity Exchange today, oils futures fluctuate to adjust in early trade but then quickly rally to expand gains in afternoon session. Spot soybean oil and palm oil go up 50-100 CNY/tonne in the morning. China’s stocks of palm oil and rapeseed oil are not huge at present.  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 stay at high levels.

Corn oil: Corn oil prices are mostly stable with a partial rise of 100-200 in China today. Grade I corn oil price is 10,400-10,700 CNY/tonne (Shandong 10,500-10,600 CNY, up 100 CNY; and Liaoning 10,400, up 200 CNY); and crude corn oil is offered at 8,800-9,250 CNY/tonne (Henan 8,800 and Hebei 9,000-9,250).

Due to a rise in feedstock corn germ prices and high processing cost, sellers have strong sentiment to support prices. And processors are mainly fulfilling contracts as purchases have been brisk before the festival. These are bullish to corn oil market. But corn oil prices are not competitive compared to rival oils, in addition to limited demand, which is weighing down the market. Overall, short-term corn oil market is predicted to keep steady in China.

(USD $1=CNY ¥6.45)