Today (Mar 22), 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 fluctuate 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, cottonseed market will continue moving with fluctuations in a short term but the downside for its market may be restricted.

Oils: 

Summary: U.S. soybean futures soared last Friday on slow soybean harvests in Brazil. And on China’s Dalian Commodity Exchange today, palm olein futures post notable gains and soybean oil futures also stay above the previous close in spite of corrections. In the spot markets, soybean oil mostly goes up 50-70 CNY and palm oil up 90-110, attracting some low-level purchases.

China’s soybean crush rose 8% weekly to 1.56 mln tonnes last week but still stayed at a low level, and soybean oil fell 2% weekly to 730,000 tonnes. At the same time, edible palm oil stocks dropped 11% weekly to 500,000 tonnes, and rapeseed oil stocks are also low. In addition, Malaysian palm oil product exports from March 1-20 rose 6.8% on month, which is also bullish to the market and bolsters oils prices to rise. But due to a volatile financial market, short-term oils market is expected to follow futures to fluctuate frequently, and it is still necessary to keep cautious.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,760-9,940 CNY/tonne in domestic coastal areas, mostly up 50-70 CNY/tonne. (Tianjin traders 9760-9790; Rizhao traders 9750; Zhangjiagang traders 9900-9940; and Guangzhou traders 9790). 

Palm oil: RBD palm olein is mainly priced at 8,130-8,260 CNY/tonne in coastal areas, mostly up 90-110 CNY/tonne. (Tianjin traders 8260, up 90; Rizhao traders not available; Zhangjiagang traders 8160, up 110; Guangzhou traders 8130-8140, up 100; and Xiamen not available).

Rapeseed oil: U.S. soybean futures settled higher last Friday, and rapeseed oil futures post moderate gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle up 40 CNY at 10,710-11,050 CNY/tonne in coastal regions in thin trading.

China’s rapeseed oil stocks fell 8% on week to 203,000 tonnes as of March 19, and soybean oil inventories also continued a downtrend. Net crush margins for imported U.S. soybeans on Dalian and Canadian canola on Zhengzhou are both at loss at present, and not a few mills will suspend soybean crush in March and April due to soybean shortages. These fundamentals are lending support to the oils market in China. But China is underway to sell crude soybean oil from its reserves, with around 20,000 tonnes for each auction. It is a sign that the nation is trying to control the quick rise in oils prices through policies. Rapeseed oil market is predicted to fluctuate frequently at high level, and participants need to remain cautious.

Cottonseed oil: Cottonseed oil prices in part fluctuate by 100-200 CNY/tonne in China today. Some cottonseed oil plants mainly fulfill previous contracts amid weak demand from market, which drags down cottonseed oil price. But U.S. soybean futures bumped up on Friday. Dalian Palm oil futures post drastic gains today, and soybean oil futures stay higher than the previous close despite fluctuations. In the spot market, soybean oil mostly increases by 50-70 CNY/tonne and palm oil rises by 90-110 CNY/tonne. For the moment, the stockpiles of palm oil and soybean oil keep falling. Hence, oils remain bullish on fundamentals. Besides, a majority of oil plants are idled currently, which limits price declines of cottonseed oil. It is predicted that cottonseed oil market will still fluctuate in the short run but still maintain the high level on the whole.

Sunflower oil: Sunflower oil prices steady in China today. Grade I imported refined sunflower oil is offered at 13,500-14,300 CNY/tonne; and crude sunflower oil is 12,800 CNY/tonne.

U.S. soybean futures rose last Friday, and on China’s Dalian Commodity Exchange today, palm olein futures post notable gains and soybean oil is above the previous close in spite of corrections. Spot soybean oil mostly goes up 50-70 CNY/tonne and palm oil up 90-110 CNY. Moreover, sunflower oil import cost is still lifted by high prices in Ukraine. These are supporting sunflower oil market. But downstream buyers are choosing corn oil as a substitute due to high sunflower oil prices, which is bearish to the market. 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 no offers; Liaoning 12,500; and Sichuan no offers); and crude corn oil is offered at 10,400-11,200 CNY/tonne. (Henan 10,400; Hebei 10,800-11,200; 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, which is negative to the market. Overall, corn oil market in China is predicted to fluctuate in the near term.

(USD $1=CNY ¥6.52)