Today (Mar 1), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Domestic port soybean supply is increasing as cargoes from non-major producing countries are arriving at ports, whilst the market is in tepid trade, which are constraining the imported soybean market in China. But the overall port supply remains small at present. And the cost of importing soybeans stays stubbornly high as U.S. soybean prices are strong amid a slow crop harvest in Brazil. In a hybrid of the bull and the bear, short-term imported soybean market will be little changed. Participants can keep an eye on imported soybean arrivals and demand in China.

Cottonseed: Cottonseed prices in China partly stay stable and rise by 0.02-0.06 CNY/kg in several regions today. 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. However, 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. With bulk oils and meals strengthening, it is expected that cottonseed price will also stay strong in the near term.

Oils: 

Summary: U.S. soybean futures fell last Friday on long profit-taking as Brazilian farmers were expected to harvest record soybean crops and to speed up the harvest in March and Chinese buyers slowed down U.S. soybean purchases recently. But oils futures post strong gains on China’s Dalian Commodity Exchange today on bullish fundamentals and as investors go long. In the spot markets, soybean oil goes up 220-300 CNY/tonne and palm oil up 140-180 CNY/tonne, both in tepid trade.

China’s soybean crush did not rise as much as expected last week, and as soybean arrivals are forecast to be only 95 vessels or 6.20 mln tonnes in March, some mills have a plan for downtime in March and April. Buyers are back to the market after the festival, so China’s soybean oil stocks decline 3% to 847,000 tonnes this week, and palm oil and rapeseed oil stockpiles are also small. Besides, the U.S. House of Representative has passed the $1.9 trillion coronavirus package, so domestic funds show strong sentiment to go long in oils futures under ample liquidity. And Grade I soybean oil prices have stood over the level of 10,000 CNY at main ports in southern China. Overall, the oils market is predicted to keep a strong trend in the short term, but is mainly driven by funds today. The market is hugging for more and more uncertainty in the wake of huge gains after the festival, so participants need to pay more attention.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,830-10,030 CNY/tonne in domestic coastal areas, a rise of 220-300 CNY/tonne. (Tianjin traders 9,830-9,860; Rizhao traders 9,850; Zhangjiagang traders 10,010; and Guangzhou traders 10,030). 

Palm oil: RBD palm olein is mainly priced at 8,270-8,350 CNY/tonne in coastal areas, up 140-180 CNY/tonne. (Tianjin traders 8310-8320, up 180; Rizhao traders 8350, up 160; Zhangjiagang traders 8270, up 140; Guangzhou traders 8270, up 180; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell last Friday on long profit-taking as Brazilian farmers were expected to harvest record soybean crops and Chinese buyers slowed down U.S. soybean purchases recently. But oils futures open high and rise in China’s commodity exchanges today. Spot rapeseed oil prices settle up 190 CNY at 11,120-11,270 CNY/tonne in coastal regions in tepid trading.

No pressure is noted in oils supplies in domestic markets, and rapeseed oil stocks have fallen by 15.9% to 188,000 tonnes in the week as of Feb 26. Besides, some domestic mills will suspend soybean crush in March as soybean imports are forecast to be only 6.2 mln tonnes in the month. And net board crush margins for imported U.S. soybeans are at loss currently. Besides, the U.S. House of Representative has passed the $1.9 trillion coronavirus package, so domestic funds show strong sentiment to go long in oils futures under a bearish outlook for the U.S. dollar. Overall, rapeseed oil market is predicted to strengthen at the high level in the near term.

Cottonseed oil: Cottonseed oil prices mostly increase by 100-600 CNY/onne in China today. U.S. soybean futures dipped on Friday. But oils futures post wild gains on supportive fundamentals and profit taking on Dalian Commodity Exchange today. In the cash market, soybean oil jumps 220-300 CNY/tonne and palm oil rises by 140-180 CNY/tonne. Soybean arrivals in March are forecast to be only 95 cargoes or 6.2 mln tonne, making many crushing mills idled during the month of March and April. With buyers replenishing stocks again, currently soybean oil stocks decline by 3% to 847,000 tonnes. Also, palm oil and rapeseed oil stockpiles stay at a relatively low level, temporarily with no pressure on supply side. Thus, the overall oils market will continue the strength in the near term. In addition to this, a majority of oil plants have yet to resume the operation, which is bullish for cottonseed oil. It is projected that short-term cottonseed oil market will still maintain the high level on the whole.

Sunflower oil: Sunflower oil prices are mostly stable with a partial rise in China today. Grade I imported refined sunflower oil is offered at 11,900-12,300 CNY/tonne, a partial rise of 100-500 CNY/tonne.

U.S. soybean futures fell last Friday on long profit-taking as Brazilian farmers were expected to harvest record soybean crops and to speed up the harvest in March and Chinese buyers slowed down U.S. soybean purchases recently. But oils futures post strong gains on China’s Dalian Commodity Exchange today on bullish fundamentals and as investors go long. In the spot markets, soybean oil goes up 220-300 CNY/tonne and palm oil up 140-180 CNY/tonne. Add to that, downstream buyers choose to use corn oil as sunflower oil prices stay at high levels, which is also bearish to the market. But sunflower oil import cost has been lifted as the reduction in Ukrainian sunflowerseed production has pushed higher prices. In the near term, sunflower oil market in China is predicted to stay at the high level.

Corn oil: Corn oil prices are mostly stable with a partial rise in China today. Grade I corn oil price is 10,600-11,000 CNY/tonne, with a partial rise of 300 CNY. (Shandong 11,000 CNY, Hebei 11,000, up 300 CNY; and Liaoning 11,000); and crude corn oil is offered at 9,300-10,000 CNY/tonne, with a partial rise of 100-500 CNY. (Henan 9,500, up 500, Hebei 9,850-10,000, up 100; and Inner Mongolia 9,300).

The processing cost for corn oil remains high due to a rise in feedstock corn germ prices, and operation rates are lower as corn germ is in tight supply. Hence, oil millers have strong sentiment to support prices. In addition, Dalian oils futures post strong gains today, and spot soybean oil goes up 220-300 CNY/tonne and palm oil up 140-180 CNY, which will also help bolster corn oil market. But downstream buyers tend to wait after corn oil prices increase to such high levels. Overall, short-term corn oil market is predicted to maintain a strong trend in China.

(USD $1=CNY ¥6.48)