Today (Mar 29), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Port soybean stocks decrease as trade soybeans at Shandong ports are partially flowing into local crushing mills, which is lending support to the market. But downstream demand is tepid and buyers are not active, and the overall market is in wait-and-see mood. Moreover, U.S. soybean futures are easing on cooling export demand as global soybean demand turn to South American markets, so the support from the import cost side is subdued. Meanwhile, China’s huge soybean arrival prospects, as Brazilian soybeans are flowing into the market, will also be negative to local imported soybean prices. Overall, imported soybean market in China is predicted to fluctuate in the short run, 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 0.02-0.04 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: The market forecast that U.S. soybean planting acreage will hit a record of 90 mln acres this year, up by 7 mln acres from last year; Brazilian producers were expected to quicken their pace of soybean harvests and exports, and Argentine farmers also launched soybean harvests in some regions; and the export demand for U.S. soybeans was cooling. Hence, U.S. soybean futures closed lower last Friday. Oils futures continue declining on China’s Dalian Commodity Exchange today, but losses are smaller than the previous session. In the spot markets, soybean oil goes down 40-100 CNY/tonne and palm oil partially down 10-20 CNY, both in thin trade.

China’s Ministry of Commerce said it will release central reserves timely. And China’s monthly soybean arrivals at ports are forecast to hit 10 mln tonnes in May-July. Investors close long positions as stock market and crude oil are in retreat. Hence, Dalian oils are on a decline. But losses on Dalian are smaller today after oils prices plunge last Friday. And soybean crush also fell 0.3% to 1.56 mln tonnes last week, and both soybean oil and palm oil stocks are on a downtrend. The overall fundamentals are still bullish. Short-term oils market fluctuates frequently and sees a bigger-than-expected decline on growing marketing pressure from South American soybeans and a volatile financial market. Participants are suggested to be cautious and keep light stockpiles.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,290-9,590 CNY/tonne in domestic coastal areas, a decline of 40-100 CNY/tonne. (Tianjin traders 9290-9340; Rizhao traders 9400; Zhangjiagang traders 9590; and Guangzhou traders 9320-930). 

Palm oil: RBD palm olein is mainly priced at 7,840-7,920 CNY/tonne in coastal areas, mostly down 10-20 CNY/tonne. (Tianjin traders 7900-7920, down 20; Rizhao traders not available; Zhangjiagang traders 7840, flat; Guangzhou traders 7840-7870, down 10; and Xiamen not available).

Rapeseed oil: U.S. soybean futures closed lower last Friday, and rapeseed oil futures open low and decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 30 CNY at 10,590-10,780 CNY/tonne in coastal regions in thin trading.

China’s rapeseed oil stocks rose 7.3% to 218,000 tonnes last week. And China’s monthly soybean arrivals at ports are forecast to climb to 10 mln tonnes in May-July, as Brazilian producers are ramping up soybean sales. China’s Ministry of Commerce said that it will make releases from central reserves when necessary, so that traders are growing fearful of policy control risks. And investors are closing long positions due to low stock market. These are weighing on rapeseed oil 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 with a partial decrease of 100-200 CNY/tonne in China today. CBOT soybean futures closed down on Friday. Oils futures narrow their losses relative to the previous closing decline on Dalian Commodity Exchange today despite a further drop. In the spot market, soybean oil falls by 40-100 CNY/tonne and palm oil slips 10-20 CNY/tonne. Soybean arrivals are likely to reach 10 mln tonnes each month in May-July. And those bulls close their position as stock market and crude oil retreat, so that oils futures are still in a downside. Besides, cottonseed oil is in tepid trade due to sluggish demand currently, and some factories mainly fulfill previous contracts. This has dragged down cottonseed oil price to keep edging down. However, the stockpiles of soybean oil and palm oil are in a downward trend. Hence, oils remain bullish on fundamentals. Additionally, a majority of oil plants are idled currently, which offers a support to cottonseed oil market. It is projected that short-term cottonseed oil market may follow bulk oils to fall.

Sunflower oil: Sunflower oil prices steady with a partial decline in China today. Grade I imported refined sunflower oil is offered at 13,000-14,300 CNY/tonne; and crude sunflower oil is 13,000 CNY/tonne.

U.S. soybean futures closed lower last Friday, and Dalian oils futures also continue a small decline today. Spot soybean oil goes down 40-100 CNY/tonnes and palm oil partially down 10-20 CNY. 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 with a partial decline in China today. Grade I corn oil is 12,000-12,500 CNY/tonne, down 500 CNY from last Friday. (Shandong 12,000-12,500 CNY, down 500; Hebei no offer; Liaoning 12,500; and Sichuan no offer); and crude corn oil is offered at 10,100-11,000 CNY/tonne, down 200 CNY. (Henan 10,100, down 200; Hebei 11,000; Inner Mongolia 11,000; and Heilongjiang no offer).

Downstream purchasers are acting with caution and keep themselves to sidelines since corn oil prices have climbed to a high level. And the weak demand is leading to lower trading price than offers in corn oil market, so some millers are mainly carrying out outstanding contracts. Besides, the decline in rival sunflower oil price may also affect 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)