Today (Mar 9), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybean supply keeps increasing at domestic ports, but the market demand is tepid and downstream buyers are not active, so holders are weak in hiking prices. But U.S. soybean futures remain strong on slow soybean harvests in Brazil under unfavorable weather conditions, so that domestic import cost keep climbing, which is supporting imported soybean market. 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 increase by 0.02-0.08 CNY/kg 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. Driven by supportive factors, it is expected that cottonseed market still stay relatively strong on the whole.

Oils: 

Summary: U.S. soybean futures rose on Monday, as Brazilian soybeans were only 35% harvested due to rainy weather, down from 49% last year and the slowest pace in a decade and as dry and hot weather was pressuring soybean crop development in Argentina. Oils futures extend an uptrend on China’s Dalian Commodity Exchange today, but gains are being narrowed. In the spot markets, soybean oil goes up 80-110 CNY/tonne and palm oil up 60 CNY, both in thin trade.

SPPOMA data showed that Malaysian palm oil production rose 25.32% in March 1-5, while ITS data pointed out a continued 9.1% decline in exports. This triggers concerns over the demand and weakens funds enthusiasm, thus exerting a certain influence on Dalian futures. But the overall strong trend on Dalian remains unchanged as current fundamentals remain bullish. China’s soybean crush stayed below the forecast due to port congestion in Rizhao and a lack of beans in some mills, and some mills also have a plan for downtime in March and April. China’s soybean oil stocks have fallen 2% weekly further to 830,000 tonnes now. And high U.S. soybean prices also keep import cost remain high. Meanwhile, meal prices take a weak trend as hog prices are low and the African swine fever edges up, so traders are active in arbitraging by long oils and short meals. Besides, U.S. Senate has passed the $1.9 trillion stimulus package, so the global liquidity is ample and funds are bullish about the commodity market, especially in oils market of bullish fundamentals. The overall oils market will keep a strong trend in China. But current sharp gains in the oils market is largely driven by funds, and stock market has been declining for several sessions, so it is necessary to keep an eye on volatile macro factors.

Soybean oil: GB Grade I soybean oil is mainly priced at 10,380-10,600 CNY/tonne in domestic coastal areas, a rise of 80-110 CNY/tonne. (Tianjin traders 10,380-10,410; Rizhao traders 10,350; Zhangjiagang traders 10,600; and Guangzhou traders 10,450-10,500). 

Palm oil: RBD palm olein is mainly priced at 8,340-8,440 CNY/tonne in coastal areas, mostly up 60 CNY/tonne. (Tianjin traders 8,440, up 60; Rizhao traders not available; Zhangjiagang traders 8,370, up 60; Guangzhou traders 8,340-8,390, up 60; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose on Monday, and rapeseed oil futures continue rising on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 150 CNY at 11,600-11,830 CNY/tonne in coastal regions in tepid trading.

Due to tight supply of old rapeseed in Canada, crush margins for rapeseed are negative in China, thus affecting processors’ decision on buying vessels. Domestic oils supplies are not under pressure, as rapeseed oil stocks fell 10% to 169,000 tonnes last week, soybean oil stocks have fallen 2% weekly further to 830,000 tonnes now, and domestic palm oil stocks at ports are also lower than this time in previous years. Meanwhile, U.S. Senate has passed the $1.9 trillion stimulus package, so the global liquidity is ample and funds are bullish about the commodity market, especially in oils of tightening inventories. These are supporting the oils market in China. The overall rapeseed oil market is predicted to strengthen at the high level, but stock market has been declining for several sessions, so it is necessary to keep an eye on volatile macro factors.

Cottonseed oil: Cottonseed oil prices stand firm with a partial increase of 150-200 CNY/tonne in China today. U.S. soybean futures further rose on Monday. Oils futures extend the rally but narrow their rises on Dalian Commodity Exchange today. In the spot market, soybean oil rises by 80-110 CNY/tonne and palm oil mostly represents an increase of 60 CNY/tonne. The oils remain relatively bullish on fundamentals for the moment. Some crushing mills in Shandong are short of soybeans due to port congestion in Rizhao port, making the rises in soybean crush steadily lower-than-anticipated. And many plants plan to suspend the operation during the month of March and April. At the moment, soybean oil stocks have declined by 2% weekly to 830,000 tonnes. Likewise, palm oil and rapeseed oil stockpiles are lower than the level in corresponding period in former years. Besides, the cost of importing soybean stays high amid the strength on U.S. soybeans. 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 12,800-14,000 CNY/tonne; and crude sunflower oil at 12,600 CNY/tonne.

U.S. soybean futures continued gains on Monday. Dalian oils futures also extend an uptrend but are narrowing down rises today, and spot soybean oil goes up 80-110 CNY and palm oil up 60 CNY/tonne. 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 keep a strong trend.

Corn oil: Corn oil prices continue a partial rise in China today. Grade I corn oil price is 11,500-12,000 CNY/tonne. (Shandong 12,000 CNY; Hebei no offers; Liaoning 11,500; and Sichuan 11,800); and crude corn oil is offered at 10,000-10,500 CNY/tonne, up 100 CNY. (Henan 10,100, up 100 CNY; Hebei 10,500; 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. U.S. soybean futures continued gains on Monday, and Dalian oils futures also extend an uptrend today. Besides, sunflower oil prices also keep firm, which is 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 ¥6.53)