Today (Mar 17), 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 mainly stay stable but decrease by 0.02-0.04 CNY/kg in some regions of China today. Cottonseed crushing mills keep facing losses on account of early 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. 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. Underpinned by tight supply of cottonseed, the downside for its market will be restricted in the short run, and cottonseed market will stay strong on the whole.

Oils: 

Summary: U.S. soybean futures rose on Tuesday as rains were delaying soybean harvests in Brazil. But BMD palm oil futures plunged on Tuesday as SPPOMA data showed a 62% surge in Malaysian palm oil production in the first 15 days of March. And China is to sell 20,875 tonnes of crude soybean oil imported in 2019 on March 19, coupled with the end of the arbitrage and the technical correction in the wake of consecutive rises, so oils futures slump on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 50-150 CNY/tonne and palm oil down 80-110 CNY, possibly in weaker trade.

But fundamentals are still strong in the oils market. China’s soybean oil stocks also further declined nearly 10% further to 740,000 tonnes as the crush fell 14% on week to 1.44 mln tonnes last week due to soybean shortages and swelling meal inventory. Meanwhile, domestic palm oil stocks also fell 6.5% on week to 560,000 tonnes, and rapeseed oil stocks are also small. The overall oils market still keeps its strength, but short-term trend is in correction on concerns over national soybean oil selling and technical adjustments. Participants are suggested to remain cautious and keep light positions.

Soybean oil: GB Grade I soybean oil is mainly priced at 10,090-10,240 CNY/tonne in domestic coastal areas, a decline of 50-150 CNY/tonne. (Tianjin traders 10,090; Rizhao traders 10,150; Zhangjiagang traders 10,240; and Guangzhou traders 10,140). 

Palm oil: RBD palm olein is mainly priced at 8,190-8,310 CNY/tonne in coastal areas, mostly down 80-110 CNY/tonne. (Tianjin traders 8290-8310, down 100; Rizhao traders not available; Zhangjiagang traders 8240, down 80; Guangzhou traders 8190-8230, down 110; and Xiamen not available).

Rapeseed oil: U.S. soybean futures rose further on Tuesday as rains continued disrupting soybean harvests in Brazil. As a latest release said that China is to sell 20875 tonnes of imported crude soybean oil on March 19, and also due to a sharp loss in BMD palm oil futures on Tuesday, Dalian palm olein futures lead the loss in domestic oils market today. Spot rapeseed oil prices settle down 200-230 CNY at 10,900-11,270 CNY/tonne in coastal regions in thin trading.

Current higher rapeseed oil price than soybean oil and palm oil is destroying the consumption, and long money sentiment is also affected by recent sharp loss in stock markets so that fund side is more unstable. But the overall oils market is not under supply pressure in China as stocks of soybean oil, palm oil and rapeseed oil are all lower than this time in previous years. And some domestic crushers will suspend production periodically in March and April for a lack of beans. Bolstered by bullish factors, rapeseed oil market is predicted to follow futures to fluctuate to adjust at the high level in the short term and keep its strong pattern overall.

Cottonseed oil: Cottonseed oil prices partly drop by 100-200 CNY/tonne in China today. Data by SPPOMA showed that Malaysian palm oil production during the first 15 days of March surged by 62%. Palm oil on Bursa Malaysia Derivatives responded to tumble on Tuesday. And oils futures on Dalian Commodity Exchange also plummet today. In the spot market, soybean oil decreases by 50-150 CNY/tonne and palm oil falls by 80-110 CNY/tonne.

Some cottonseed oil plants mainly fulfill previous contracts amid weak demand from market, which drags down cottonseed oil price. But oils are still relatively bullish on fundamentals for the moment. There will be a period of downtime for many soyoil mills due to shortages of soybeans. In this case, soybean oil stocks further dwindle by nearly 10% to around 740,000 tonnes. Likewise, palm oil stockpiles are 6.5% lower at 560,000 tonnes, and rapeseed oil stocks also stay at a low level. With supportive factors on fundamentals, oils market will maintain a strong uptrend. Besides, a majority of oil plants are idled currently, which boosts cottonseed oil price. It is predicted that cottonseed oil market will follow bulk oils to edge down in the short run but still maintain the high level on the whole.

Sunflower oil: Sunflower oil prices steady and some mixed in China today. Grade I imported refined sunflower oil is offered at 13,500-14,300 CNY/tonne; and crude sunflower oil id not offered.

China’s soybean oil stocks also further declined nearly 10% further to 740,000 tonnes as the crush fell 14% on week to 1.44 mln tonnes last week due to soybean shortages and swelling meal inventory. Meanwhile, domestic palm oil stocks also fell 6.5% on week to 560,000 tonnes, and rapeseed oil stocks are also small. The overall oils market is keeping its strong trend. In addition, sunflower oil import cost is lifted as Ukraine sunflower oil prices stay high compared to this time in previous years. These are supporting sunflower oil market. But Dalian oils futures slump today, and spot soybean oil and palm oil also decline, which is negative to sunflower oil market. Overall, sunflower oil market is predicted to fluctuate to strengthen.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil price is 12,500-13,000 CNY/tonne. (Shandong 12,500-13,000 CNY; Hebei no offers; Liaoning 12,500; and Sichuan no offers); and crude corn oil is offered at 10,400-11,000 CNY/tonne. (Henan 10,400; Hebei 10,900; and Inner Mongolia 10,500).

As high corn germ prices keep processing cost at a high level and also due to tight feedstock, the market has strong sentiment to support prices. And domestic sunflower oil prices also stay at the high level. These 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 ¥6.50)