Today (Apr 7), the market for oilseeds and oils in China is shown as follows:

Oilseeds:

Imported soybean: Imported soybean stocks are ample at domestic ports now, and 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. These are negative to imported soybean market in China. But the market demand has picked up as downstream buyers have consumed stocks and are making replenishment. This is lending support to the market. 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 unchanged and partly increase by 0.02-0.04 CNY/kg today. 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. But 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. Therefore, short-term cottonseed price is predicted to continue fluctuating.

Oils: 

Summary: U.S. soybean futures extend gains on Tuesday on lower-than-expected planting projections and supply tensions and as rains postponed soybean harvests in South America. Oils futures keep an uptrend on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 50-140 CNY/tonne, and the trade remains tepid after a price rise.

China’s soybean crush fell 1.2% to 1.55 mln tonnes last week for a lack of beans or swelling meal inventories, so commercial soybean oil stocks also reduced further by nearly 8% to 620,000 tonnes. Meanwhile, port edible palm oil and rapeseed oil stocks are also low compared to this time in previous years. And crush margins for imported soybeans on Dalian are also at loss. Hence, fundamentals in the oils market remain bullish. In addition, a rise in U.S. soybeans will also lift the cost for soyoil. These combine to bolster the oils market to strengthen recently. But China’s soybean arrivals will reach 27 mln tonnes from April to June as South American soybeans are flooding into the market. Moreover, China is restarting reserved rapeseed oil auctions, so there remain risks in policy control. Besides, Malaysian palm oil output will also see a rise seasonally soon, and Chinese investors have cooler risk appetite sentiment under volatile financial markets. These may add to fluctuations in the market. Overall, short-term oils market may follow futures to strengthen in fluctuation in the near term.

Soybean oil: GB Grade I soybean oil is mainly priced at 9,460-9,630 CNY/tonne in domestic coastal areas, a rise of 60-140 CNY/tonne. (Tianjin trader 9460; Rizhao trader 9500; Zhangjiagang trader 9630; and Guangzhou trader 9480-9500). 

Palm oil: RBD palm olein is mainly priced at 8,120-8,260 CNY/tonne in coastal areas, mostly up 50-110 CNY/tonne. (Tianjin trader 8200, up 80; Rizhao trader 8260, up 110; Zhangjiagang trader 8120, up 80; Guangzhou trader 8120, up 50; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures rose on Tuesday, and rapeseed oil futures continue rising on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 40-70 CNY to 10,810-11,120 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. These bullish fundamentals are bolstering rapeseed oil prices to strengthen. Short-term rapeseed oil market is predicted to strengthen at the high level. But China’s soybean arrivals will climb in the second quarter as Brazilian soybean harvests and exports are progressing at a brisker pace. And Malaysian palm oil output will also see a rise seasonally soon. Hence, rapeseed oil market will fluctuate frequently at the high level.

Cottonseed oil: Cottonseed oil prices mainly stay stable with a partial decrease of 100 CNY/tonne in China today. Cottonseed oil is offered higher but traded lower due to sluggish demand currently, in subdued trade. And its price has yet to follow bulk oils to go up. However, concerns over tight supplies of U.S. soybean due to potential lower-than-expected planting acreage, coupled with a delay in soybean harvest in South America disrupted by rain together sent CBOT soybean futures higher on Tuesday. Dalian oils futures extend the rally today. In the spot market, soybean oil and palm oil represent an advance of 50-140 CNY/tonne. 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.

U.S. soybean futures extend gains on Tuesday on lower-than-expected planting projections and supply tensions and as rains postponed soybean harvests in South America. Oils futures keep an uptrend on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 50-140 CNY/tonne. In addition, a rally in U.S. soybeans will also lift the cost for soyoil. These are bullish to sunflower oil market. But China’s soybean arrivals will reach 27 mln tonnes from April to June as South American soybeans are flooding into the market. Moreover, China is restarting reserved rapeseed oil auctions, so there remain risks in policy control. And more downstream buyers are using corn oil to substitute sunflower oil, which is also bearish 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 steady with a weakening trend in fluctuation in China today. Grade I corn oil is 11,600-11,800 CNY/tonne, a decline of 200-700 CNY. (Shandong 11,500-11,800 CNY, down 500-700; Hebei 11,800-12,000; Liaoning 11,600, down 200; and Sichuan 11,500); and crude corn oil is offered at 10,000-10,800 CNY/tonne, a partial rise of 100 CNY. (Henan 10,200, up 100; Hebei 10,000-10,200; Inner Mongolia 10,800; 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. Moreover, the cost of corn oil has fallen as corn germ prices keep declining. These are cracking down corn oil prices. Besides, it is now the off-season for oils, which is also affecting spot corn oil price. 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)