Today (Mar 31), 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 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: As Brazilian producers were selling soybeans at a brisker pace, coupled with technical selling and long liquidation ahead of USDA reports, U.S. soybean complex futures plunged on Tuesday. And Dalian soybean oil futures lead the decline on China’s oils market today. In the spot markets, soybean oil tumbles by 200-330 CNY/tonne and palm oil mostly down 60-140 CNY, both in thin trade.

Sluggish demand from major buyers India and China contributed to a steep fall in BMD palm oil futures on Tuesday, U.S. soyoil futures recorded a limit-down for a third time in four straight sessions, and global vegetable oils prices slumped across the board. These are stressing strongly on domestic oils market. In the meantime, China’s monthly soybean arrivals at ports are forecast to hit 10 mln tonnes in May-July, for Brazilian producers are harvesting and selling soybeans at a brisker pace. And China’s Ministry of Commerce said last Thursday that it would release central reserves when necessary. Besides, investors show cooler risk appetite sentiment due to a volatile global financial market. These combine to weigh on movements in spot oils market.

China’s soybean oil and palm oil stocks are not huge now, of which commercial soybean oil inventories hit a multi-year low of less than 700,000 tonnes. However, domestic investors are closing long positions to avoid risks. And the USDA is expected to raise its estimates on soybean planting intentions in its annual report due on Wednesday. Hence, short-term fluctuation and retreat in spot oils may have not come to an end, and buyers can keep to the sidelines instead of change positions.

Soybean oil: GB Grade I soybean oil is mainly priced at 8,940-9,140 CNY/tonne in domestic coastal areas, a decline of 200-300 CNY/tonne. (Tianjin trader 8940; Rizhao trader 8940-8990; Zhangjiagang trader 9140; and Guangzhou trader 8940-8970). 

Palm oil: RBD palm olein is mainly priced at 7,640-7,730 CNY/tonne in coastal areas, mostly down 50-80 CNY/tonne. (Tianjin trader 7700, down 80; Rizhao trader no offer; Zhangjiagang trader 7640, down 60; Guangzhou trader 7640-7650, down 60; and Xiamen 7730, down 50).

Rapeseed oil: U.S. soybean complex futures plunged on Tuesday on technical selling ahead of USDA reports, of which soyoil futures hit the limit-down. Rapeseed oil futures fluctuate to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes down 10 CNY to 10,450-10,680 CNY/tonne in coastal regions in thin trading.

China’s monthly soybean arrivals at ports are forecast to hit 10 mln tonnes in May-July, for Brazilian producers are harvesting and selling soybeans at a brisker pace. And China’s Ministry of Commerce said last Thursday that it would release central reserves when necessary. Besides, investors show cooler risk appetite sentiment due to a volatile global financial market. These combine to weigh on domestic oils market. But soybean oil, palm oil and rapeseed oil stocks are all lower than this time in previous years, so the supply of oils is not under pressure in domestic market. And net crush margins for soybean and rapeseed oil are both negative on board. Hence, the declines in rapeseed oil prices are not big now. Short-term rapeseed oil market is predicted to continue retreating at the high level as investors are closing long positions, and buyers can wait for the moment.

Cottonseed oil: Cottonseed oil prices mostly slump 100-300 CNY/tonne in China today. CBOT soybean futures tumbled on Tuesday. Soybean oil futures lead the decline and drastically drop again on Dalian Commodity Exchange today. In the spot market, soybean oil plummets by 200-330 CNY/tonne and palm oil mostly decreases by 60-140 CNY/tonne. Investors cool down their risk appetite sentiment against the backdrop of volatile global financial market, which weighs on domestic oils cash market. 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. Oils futures expand losses again after noon. It is projected that short-term cottonseed oil market may follow bulk oils to fluctuate to fall. Buyers can tentatively take a wait-and-see attitude.

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 13,000 CNY/tonne.

China’s soybean crush fell 0.3% to 1.56 mln tonnes last week, and soybean oil stocks reduced to hit a multi-year low of less than 700,000 tonnes. Domestic palm oil stocks are also on a decline. In addition, crush margins for imported soybeans on Dalian are at heavy loss, so that millers have sentiment to support prices. But U.S. soybean-related futures plunged on Tuesday, and Dalian soybean oil futures also lead the decline in China’s oils market today. Spot soybean oil goes down 200-330 CNY and palm oil mostly down 60-140 CNY, which is negative to sunflower oil market. Overall, sunflower oil market is predicted to fluctuate at the high level 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 200 CNY. (Shandong 12,000-12,500 CNY; Hebei no offer; Liaoning 12,200, down 200; and Sichuan no offer); and crude corn oil is offered at 10,100-11,000 CNY/tonne. (Henan 10,100; 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 weak trend 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 ¥6.57)