Today (Apr 1), 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 mostly keep steady and partly increase by 0.02-0.06 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. Therefore, short-term cottonseed market is predicted to continue fluctuating.

Oils: 

Summary: U.S. soybean futures finished up its daily limit on Wednesday on much lower-than-expected acreage in USDA’s release, and U.S. soyoil also hit the limit-up in the session. Oils futures follow to climb but with smaller gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 200-300 CNY/tonne and palm oil up 110-170 CNY, both in thin trade.

U.S. soybean prices soar to settle above 1400 cents, which will bolster the cost side of soybean oil in China. China’s commercial soybean oil stocks have fallen to a multi-year low of less than 700,000 tonnes, and palm oil and rapeseed oil stocks also remain low. These bullish fundamentals together push oils prices to welcome a wave of bounces in the wake of continuous declines. However, China’s monthly soybean arrivals at ports will hopefully climb to 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 later March that it would work together with authorities to release central reserves when necessary so as to increase the market supply, a sign that there are more risks in policy control. Southeast Asian countries will see a seasonal rise in palm oil production very soon, and South American producers are marketing their soybeans. And the bullish sentiment is still affected by the decline in stock market and crude oil price. All these may constrain further bounces in domestic oil prices. It is necessary to watch out for risks as domestic oils market may fluctuate and retreat again in the wake of rallies.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,180-9,350 CNY/tonne in domestic coastal areas, a rise of 200-300 CNY/tonne. (Tianjin trader 9180-9210; Rizhao trader 9210; Zhangjiagang trader 9350; and Guangzhou trader 9240-9260). 

Palm oil: RBD palm olein is mainly priced at 7,790-7,900 CNY/tonne in coastal areas, mostly up 140-170 CNY/tonne. (Tianjin trader 7870, up 170; Rizhao trader 7900, up 140; Zhangjiagang trader 7810, up 160; Guangzhou trader 7790-7820, up 140; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures settled up the limit on Wednesday as planting acreage projections by the USDA was lower than the market forecast. Rapeseed oil futures open high and rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 190-270 CNY to 10,630-10,890 CNY/tonne in coastal regions in thin trading.

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, short-term rapeseed oil price will keep its strength at the high level. But 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. Therefore, rapeseed oil market will fluctuate frequently at high levels in near term. It is necessary to remain cautious now.

Cottonseed oil: Cottonseed oil prices mainly stay stable with a partial increase of 100 CNY/tonne in China today. U.S. soybean futures hit limit-up on Wednesday as USDA forecasts for soybean acreages were far below expectations, and same went for soybean oil futures. Dalian soybean oil futures track the rally today but their gains are narrower than CBOT. In the spot market, soybean oil surges by 200-300 CNY/tonne and palm oil increases by 110-170 CNY/tonne.

For the moment, domestic stockpiles of soybean oil, palm oil as well as rapeseed oil are at low levels. Hence, oils remain bullish on fundamentals. These are driving oils to receive a wave of rebound after continuous declines. Additionally, most cottonseed oil plants are idled now, boosting cottonseed oil price. Likewise, cottonseed oil is in tepid trade due to sluggish demand currently, so some factories mainly fulfill previous contracts. It is projected that short-term cottonseed oil market may follow bulk oils to fluctuate. 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.

U.S. soybean futures finished up its daily limit on Wednesday on much lower-than-expected acreage in USDA’s release, and U.S. soyoil also hit the limit-up in the session. Oils futures follow to climb but with smaller gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 200-300 CNY/tonne and palm oil up 110-170 CNY. U.S. soybean prices soar to settle above 1400 cents, which will bolster the cost side of soybean oil in China. This will also be positive to sunflower oil market. But China’s Ministry of Commerce said later March that it would work together with authorities to release central reserves when necessary so as to increase the market supply, a sign that there are more risks in policy control. And more downstream buyers also choose corn oil to substitute sunflower oil, which is also bearish to the market. Overall, sunflower oil market is predicted to fluctuate at the high level in the short term.

Corn oil: Corn oil prices are stable in China today. Grade I corn oil is 12,000-12,500 CNY/tonne. (Shandong 12,000-12,500 CNY; Hebei no offer; Liaoning 12,200; 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 ¥6.56)