Today (Mar 26), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybean supply keeps increasing at domestic 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 in China keep steady with a partial decrease of 0.05 CNY/kg 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, and traders tend to dampen the price. 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. Cottonseed market is predicted to continue fluctuating due to a steep decline in bulk oils prices.

Oils: 

Summary: U.S. soybean futures closed drastically lower on Thursday on a broad setback and profit-taking in commodity, and oils futures open low and extend losses on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil slump by 400-500 CNY/tonne.

CBOT soybean oil futures went limit down on Thursday pressured by a sharp decline in crude oil price and the cooling arbitrage in long soyoil and short soymeal. BMD palm oil futures also fell on Thursday on concerns that main producers will see a rise in palm oil production under the context of the traditional recovery cycle for output. Global vegetable oil prices are taking plunge, fueling a negative influence in domestic oils futures. China’s Ministry of Commerce said that it will be difficult for farm produce prices to sharp grow in China, and the ministry will make releases from central reserves when necessary so as to increase the market supply and stabilize the agricultural market. In addition, China has released 20,000 tonnes of imported crude soybean oil each for two consecutive weeks. Hence, traders are are growing fearful of policy control risks. And as Brazilian producers are ramping up soybean sales, China’s monthly soybean arrivals at ports are forecast to reach 10 mln tonnes in May-July. Fund are closing long positions, so that domestic oils market sharply retreats today. Despite low commercial oils inventories, the bullish are exiting the market to avoid risks, so domestic spot oils prices post bigger declines than expected in this round. Buyers can keep to the sidelines at present.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,380-9,630 CNY/tonne in domestic coastal areas, a decline of 400-500 CNY/tonne. (Tianjin traders 9380; Rizhao traders not available; Zhangjiagang traders 9630; and Guangzhou traders 9380). 

Palm oil: RBD palm olein is mainly priced at 7,870-7,950 CNY/tonne in coastal areas, mostly down 440-490 CNY/tonne. (Tianjin traders 7950, down 440; Rizhao traders not available; Zhangjiagang traders 7870, down 470; Guangzhou traders 7880-7900, down 490; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed drastically lower on Thursday on a broad setback and profit-taking in commodity, coupled with a loss in BMD palm oil futures, so domestic oils prices open low and decline sharply. Spot rapeseed oil prices settle down 370-480 CNY at 10,580-10,680 CNY/tonne in coastal regions in thin trading.

China’s monthly soybean arrivals at ports are forecast to reach 10 mln tonnes in May-July, as Brazilian producers are ramping up soybean sales. China’s Ministry of Commerce said that it will be difficult for farm produce prices to sharp grow in China, and the ministry will make releases from central reserves when necessary so as to increase the market supply and stabilize the agricultural market. In addition, China has released 20,000 tonnes of imported crude soybean oil each for two consecutive weeks. Hence, traders are growing fearful of policy control risks and the bullish are exiting the market. Short-term rapeseed oil market fluctuates to go into correction territory, and this round of decline is bigger than the forecast. Buyers can stay on the sidelines at present.

Cottonseed oil: Cottonseed oil prices keep steady in China today. CBOT soybean futures plunged on Thursday. Malaysian palm oil will get a higher production in the coming season. China’s Ministry of Commerce said that domestic agricultural products prices will not grow too much and it will work with relevant departments to ensure the release of grain reserve and increase market supply in due time, so as to basically stabilize market price. After a weekly launch of approximately 20,000 tonnes of imported crude soybean oil for two weeks in a row, traders are wary of the risk in policy control. Oils futures further decline after opening low and expand losses on Dalian Commodity Exchange. In the spot market, soybean oil and palm oil plummet 400-500 CNY/tonne. Besides, cottonseed oil trading is tepid due to current sluggish demand in market, so many factories mainly fulfill the previous contracts. As a result, cottonseed oil price continues to edge lower. For the moment, the stockpiles of palm oil, soybean oil as well as rapeseed oil keep falling. Hence, oils remain bullish on fundamentals. Additionally, a majority of oil plants are idled currently, which restricts the downside for cottonseed oil market. If bulk oils market continues the declines, cottonseed oil market will also be under impact. Buyers should take notice about that.

Sunflower oil: Sunflower oil prices steady in China today. Grade I imported refined sunflower oil is offered at 13,000-14,300 CNY/tonne; and crude sunflower oil is not offered.

U.S. soybean futures closed drastically lower on Thursday on a broad setback and profit-taking in commodity. Oils futures open low and extend losses on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil slump by 400-500 CNY/tonne. And as sunflower oil prices remain high, downstream buyers tend to choose corn oil as a substitute. These are bearish to the market. But domestic millers have strong sentiment to support sunflower oil prices due to small stocks. Overall, sunflower oil market is predicted to fluctuate in the short term.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil is 12,500-12,800 CNY/tonne. (Shandong 12,500-12,800 CNY; Hebei 12,500; Liaoning 12,500; and Sichuan no offer); and crude corn oil is offered at 10,300-11,000 CNY/tonne. (Henan 10,300; Hebei 11,000; and Inner Mongolia and Heilongjiang no offers).

Downstream purchasers are acting with caution and keep themselves to sidelines since corn oil prices have climbed to a high level. And U.S. soybean futures closed drastically lower on Thursday on a broad setback and profit-taking in commodity. Oils futures open low and extend losses on China’s Dalian Commodity Exchange today, and spot soybean oil and palm oil slump by 400-500 CNY/tonne. This may also impact corn oil market. But domestic corn millers are still supporting prices due to high corn germ prices, which is bullish to the market. Overall, corn oil market in China is predicted to fluctuate to downside in the near term.

(USD $1=CNY ¥6.54)