Today (Mar 5), 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 increase by 0.02 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 on account of excessive growth in cottonseed price. In this case, they are cautious in making purchases in a bid to avoid risk, and mainly fulfill previous contracts or consume inventories. Thus, cottonseed trading is limited in spot market. It is expected that cottonseed market may keep range-bound in a near term but still stay relatively strong on the whole.

Oils: 

Summary: U.S. soybean futures rose but closed well below the intraday high on Thursday on strong demand and as rains delayed soybean harvests in Brazil and dryness affected soybean crop development in Argentina. Oils futures fluctuate to rise but with small gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up partially by 20 CNY/tonne and palm oil mostly up 50-70 CNY, both in thin trade.

China’s port soybean arrivals are estimated at 5.94 mln tonnes in February and forecast to be 6.2 mln tonnes in March. And soybean crush is seeing a smaller rise than expected this week, and some crushers will be in downtime as schedule in March and April. Oil millers are picking up the delivery with the end of the festival mood, so that soybean oil stocks fell 3% to less than 850,000 tonnes last week, and domestic palm oil stocks at ports and rapeseed oil stocks in coastal regions are also lower than this time in previous years. Funds are entering the market and the arbitrage of long oils positions and short meal positions are active. The overall oils market is predicted to keep a strong trend, but it is also necessary to watch out for fluctuations.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,870-10,100 CNY/tonne in domestic coastal areas, a partial rise of 20 CNY/tonne. (Tianjin traders 9,870-9,890; Rizhao traders 9,970; Zhangjiagang traders 10,100; and Guangzhou traders 10,010-10,040). 

Palm oil: RBD palm olein is mainly priced at 8080-8150 CNY/tonne in coastal areas, mostly up 50-70 CNY/tonne. (Tianjin traders 8120-8150, up 50; Rizhao traders not available; Zhangjiagang traders 8080, up 50; Guangzhou traders 8080, up 70; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed higher on Thursday, but rapeseed oil futures fluctuated to decline in morning trade on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 70-80 CNY at 10,940-11,140 CNY/tonne in coastal regions in tepid trading.

The market demand is slack temporarily after the festival, and the consumption of rapeseed oil in China is also affected by its huge price spread with soybean oil and palm oil. These are weighing on rapeseed oil prices. But domestic oils market is under no supply pressure, as rapeseed oil stocks fell 15.9% to 188,000 tonnes last week and soybean oil stocks down 3% to 847,000 tonnes. Besides, some soybean crushers will suspend production periodically in March and April, as soybean vessels arriving at domestic ports are forecast to be only 6.2 mln tonnes in March. With supportive fundamentals, rapeseed oil futures start to clime after testing a low in early session, and post gains in afternoon trade. Rapeseed oil market is predicted to follow futures to have little downside space in the near term, and strengthen at the high level on the whole.

Cottonseed oil: Cottonseed oil prices grow by 250 CNY/tonne in several regions of China today. U.S. soybean futures grew on Thursday but closed far below the intraday high. Oils futures fluctuate to move up on Dalian Commodity Exchange today. In the spot market, soybean oil partly rises by 20 CNY/tonne and palm oil mostly represents an increase of 50-70 CNY/tonne. The oils remain bullish on fundamentals. Besides, soybean arrivals total only 5.94 mln toones in February and are forecast to be 6.2 mln tonne in March, making many crushing mills idled during the month of March and April. What’s more, buyers start taking deliveries with festive air fading away. In this case, soybean oil stocks have declined to less than 850,000 tonnes. And palm oil and rapeseed oil stockpiles are also lower than the corresponding period in former years. 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 boosts cottonseed oil price. It is projected that cottonseed oil market will follow bulk oils to maintain a strong uptrend in a short term.

Sunflower oil: Sunflower oil prices are mostly stable with a partial rise in China today. Grade I imported refined sunflower oil is offered at 11,900-13,000 CNY/tonne.

U.S. soybean futures rose but closed well below the intraday high on Thursday on strong demand and as rains delayed soybean harvests in Brazil and dryness affected soybean crop development in Argentina. Dalian oils futures fluctuate to rise but rises are small today, and spot soybean oil partially goes up 20 CNY and palm oil mostly up 50-70 CNY/tonne. Moreover, soybean oil, palm oil and rapeseed oil stocks remain low in China at present. And sunflower oil import cost has been lifted as the reduction in Ukrainian sunflowerseed production has pushed higher prices. These are supporting sunflower oil market. In the near term, sunflower oil market in China is predicted to stay at high levels.

Corn oil: Corn oil prices continue a rise in China today. Grade I corn oil price is 11,300-12,000 CNY/tonne, up 300-400 CNY/tonne. (Shandong 11,300-12,000 CNY, up 300-400; Hebei no offers; Liaoning 11,500, up 300; and Sichuan 11,300); and crude corn oil is offered at 9,900-10,500 CNY/tonne, up 300 CNY. (Henan 9,900, up 300 CNY; Hebei 9,900-10,500, up 400; and Inner Mongolia 10,000).

The processing cost for corn oil remains high under high feedstock corn germ prices, and corn germ is in tight supplies, so oil millers have strong sentiment to support prices. And in the spots market today, soybean oil goes up partially by 20 CNY/tonne and palm oil mostly up 50-70 CNY, and sunflower oil prices also keep firm, which are bullish to corn oil market. But downstream buyers tend to wait after corn oil prices increase to such high levels, which is negative to the market. Overall, short-term corn oil market is predicted to maintain a strong trend in China.

(USD $1=CNY ¥6.49)