Today (Apr 2), 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 decrease by 0.03 CNY/kg today. Due to pricey cottonseed and consecutive losses in crush margins, oil plants 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 fluctuate frequently.

Oils: 

Summary: U.S. soybean futures settled sharply lower on Thursday as investors took profits after the price ended up its daily limit on Wednesday. Soybean oil futures continue rising but stay below the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go down 20-80 CNY/tonne, and the trade is thin for the spot month but attracting some deals on low-level forward basis.

Brazil is ramping up soybean harvests and exports, and Chinese investors have cooler risk appetite sentiment under policy control and volatile financial markets. Both are constraining the uptrend in domestic oils market. But 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. And crush margins for imported soybeans are at heavy loss on Dalian. Hence, millers are supporting oils prices under bullish fundamentals. In a hybrid of the bull and the bear, short-term domestic oils market is likely to follow futures to strengthen in fluctuation, but the fluctuation will be frequent. Buyers are suggested to keep light stockpiles.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,190-9,320 CNY/tonne in domestic coastal areas, mostly down 20-80 CNY/tonne. (Tianjin trader 9190-9240; Rizhao trader 9220; Zhangjiagang trader 9290-9320; and Guangzhou trader 9240). 

Palm oil: RBD palm olein is mainly priced at 7,820-7,950 CNY/tonne in coastal areas, mostly down 20-60 CNY/tonne. (Tianjin trader 7890, down 20; Rizhao trader 7950; Zhangjiagang trader 7820, down 60; Guangzhou trader 7840, down 50; 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. For the moment, domestic soybean oil and palm oil stockpiles are at low levels, of which the commercial stocks of soybean oil have fallen below 700,000 tonnes and recorded a multi-year low. Moreover, crushing margins for imported soybean futures have been negative on Dalian Commodity Exchange. Hence, oils remain bullish on fundamentals. Additionally, most cottonseed oil plants are idled now, boosting cottonseed oil price. But U.S. soybean futures took a dive on Thursday on profit-taking. Dalian soybean oil futures stay below the previous close today despite some rises. In the spot market, soybean oil and palm oil decrease by 20-80 CNY/tonne. Besides, 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 at the high level.

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.

China’s commercial soybean oil stocks have fallen to a multi-year low of less than 700,000 tonnes, and crush margins for imported soybeans are at heavy loss on Dalian. Hence, millers are supporting oils prices under bullish fundamentals. This is also bullish to sunflower oil market. But Chinese investors have cooler risk appetite sentiment under policy control and volatile financial markets, which is constraining the uptrend in domestic oils market. 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 with a partial decline in China today. Grade I corn oil is 11,800-12,500 CNY/tonne. (Shandong 12,000-12,500 CNY; Hebei no offer; Liaoning 11,800, down 200; and Sichuan no offer); and crude corn oil is offered at 10,000-10,800 CNY/tonne, down 200 CNY. (Henan 10,100; Hebei 10,000-10,200; Inner Mongolia 10,800, down 200; 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. 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)