Today (Mar 19), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybean supply keeps increasing at domestic ports, among which it has built up to 130,000 tonnes at Shandong ports, while the market demand remains tepid and downstream buyers are not active. These are negative to the market. Meanwhile, U.S. soybean futures are easing from the high level on improving weather in South America and on cooling export demand for U.S. soybeans, so the support from the import cost side is subdued. In the short run, imported soybean market in China is predicted to steady with a slight decline, and participants can keep an eye on imported soybean arrivals and demand in China.

Cottonseed: Cottonseed prices mainly stay stable but decrease by 0.02-0.05 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 fell on Thursday on improving weather in South America and an expected sharp rise in planting acreage under high U.S. soybean prices and as U.S. dollar index settled 0.43% higher at 91.83. Oils futures continue declining on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 170-250 CNY/tonne and palm oil down 140-190 CNY.

BMD palm oil futures sank 3.6% to hit a two-week fresh low on Thursday on a sharp rise in palm oil production so far in March and on concerns over the demand in March and April. Funds are partially going out of the futures market due to a volatile financial market in the wake of sharp loss in stock market. These are weighing on oils market to continue falling. But as soybean crush remain at a relatively low level of 1.50 mln tonnes for a lack of beans and on swelling meal inventories, China’s soybean oil stocks also further declined nearly 10% further to 740,000 tonnes. And palm oil stocks also fell 6.5% on week to 560,000 tonnes. Therefore, fundamentals remain bullish in the market. Given that U.S. soybean futures and crude oil prices retreated drastically from high levels, the oils market in China is predicted to keep easing, and buyers can stay on the sidelines.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,720-9,890 CNY/tonne in domestic coastal areas, a decline of 170-250 CNY/tonne. (Tianjin traders 9720-9740; Rizhao traders 9750; Zhangjiagang traders 9890; and Guangzhou traders 9790). 

Palm oil: RBD palm olein is mainly priced at 8,040-8,160 CNY/tonne in coastal areas, mostly down 140-190 CNY/tonne. (Tianjin traders 8140-8160, down 140; Rizhao traders not available; Zhangjiagang traders 8040, down 190; Guangzhou traders 8040, down 140; and Xiamen not available).

Rapeseed oil: U.S. soybean futures fell on Thursday, and rapeseed oil futures extend a downtrend on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 90-110 CNY at 10,720-11,020 CNY/tonne in coastal regions in thin trading.

BMD palm oil futures plunged 3.6% to hit a fresh low in two weeks on Thursday, and China will sell 20,000 tonnes of crude soybean oil on March 19, which combine to drag down rapeseed oil prices. But fundamentals remain strong in the China’s oils market at present. Domestic rapeseed oil stocks are only 221,600 tonnes, soybean oil stocks 748,200 tonnes and palm oil stocks 560,300 tonnes. Besides, some domestic crushers will suspend production periodically in March and April for a lack of beans. These are lending support to oils market. In the wake of sharp loss in U.S. soybeans and crude oil prices, China’s rapeseed oil market is predicted to follow futures to fluctuate to retreat and adjust in the short term, and keep a strong pattern on the whole.

Cottonseed oil: Cottonseed oil prices further drop by 100 CNY/tonne in several regions of China today. U.S. soybean futures slumped on Thursday. Oils futures extend losses on Dalian Commodity Exchange today. In the spot market, soybean oil decreases by 170-250 CNY/tonne and palm oil falls by 140-190 CNY/tonne. Some cottonseed oil plants mainly fulfill previous contracts amid weak demand from market, which drags down cottonseed oil price. But there will be a period of downtime for many soyoil mills due to shortages of soybeans. And some crushers are also idled by overhang of soybean meal. 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. Hence, oils remain bullish on fundamentals. 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 with a partial decline in China today. Grade I imported refined sunflower oil is offered at 13,500-14,300 CNY/tonne; and crude sunflower oil is not offered.

U.S. soybean futures fell on Thursday, and Dalian oils futures continue loss today. Spot soybean oil goes down 170-250 CNY/tonne and palm oil down 140-190 CNY in China. Moreover, downstream buyers mostly move to the sidelines as sunflower oil prices stay high compared to this time in previous years. But sunflower oil import cost is still lifted by high prices in Ukraine, so that domestic millers have strong sentiment to support prices. Overall, sunflower oil market is predicted to fluctuate to decline and adjust in the short term.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil price is 12,500-13,000 CNY/tonne. (Shandong 12,800-13,000 CNY; Hebei 12,300; Liaoning 12,500; and Sichuan no offers); and crude corn oil is offered at 10,400-10,500 CNY/tonne. (Henan 10,400; Hebei no offers; 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, the rival of corn oil, also stay at high prices. These are bullish to corn oil market. But downstream buyers tend to wait after corn oil prices increase to such high levels. And Dalian oils futures continue loss today and spot soybean oil goes down 170-250 CNY and palm oil down 140-190 CNY. These are negative to the market. Overall, corn oil market in China is predicted to fluctuate in the near term.

(USD $1=CNY ¥6.51)