Today (Apr 9), 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 fluctuate by 0.02 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 rose on Thursday. Soybean oil futures continue falling but stay above the previous close on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil mostly steady, partially fluctuating by 10-30 CNY, and the trade remains tepid.

China’s soybean crush further declines this week due to soybean shortages and swollen meal inventory, and soybean oil, palm oil and rapeseed oil stocks are all lower than this time in previous years. Moreover, crush margins for imported soybeans on Dalian are at heavy loss at present. Hence, fundamentals are still bullish in the oils market. In addition, commercial buying bolstered BMD palm oil futures to embrace a wave of bounces in the wake of continued losses. These are all lending support to domestic oils, so the market keeps mostly steady today. But China’s soybean arrivals will reach 27 mln tonnes from April to June, as South American soybeans are flooding into the market. And Chinese Vice Premier Liu He in a conference highlighted the importance to keep commodity prices basically stable and focus on price movements. And China is set to auction 22,000 tonnes of reserved rapeseed oil on April 9, according to an official notice on Tuesday, so there exist risks in policy control. Besides, Southeast Asian producers will also see a seasonal rise in palm oil output, and Chinese investors have cooler risk appetite sentiment under volatile financial markets. And domestic soybean meal prices are also rising. All the above bearish factors are constraining upward impetus in the oils market. In the short term, the oils market may fluctuate and adjust at the high level.

Soybean oil: GB Grade I soybean oil is offered at 9,230-9,400 CNY/tonne in domestic coastal areas, partially fluctuating by 10-30 CNY/tonne. (Tianjin trader 9230-9250; Rizhao trader 9250; Zhangjiagang trader 9400; and Guangzhou trader 9270). 

Palm oil: RBD palm olein is mainly priced at 7,880-8,050 CNY/tonne in coastal areas, partially fluctuating by 10 CNY/tonne. (Tianjin trader 8020-8040, up 10; Rizhao trader 8050, down 10; Zhangjiagang trader 7920, flat; Guangzhou trader 7880, flat; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures rose on Thursday, and rapeseed oil futures are moderately higher on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 70 CNY to 10,780-11,140 CNY/tonne in coastal regions in thin trading.

China’s soybean oil, palm oil and rapeseed oil stocks are all lower than this time in previous years, so domestic oils supply is not a pressure. Add to that, as crush margins for soybeans and rapeseed are at heavy loss on board, China’s soybean and rapeseed imports may be smaller than the forecast in June-August. Hence, short-term rapeseed oil market is predicted to keep its strength at the high level. But Brazilian producers are marketing soybeans at a brisker pace, so China’s soybean arrivals are expected to reach 27 mln tonnes in April-June. Besides, Malaysian palm oil will soon see a rise in output seasonally. Therefore, rapeseed oil prices will fluctuate frequently at the high level.

Cottonseed oil: Cottonseed oil prices keep steady in China today. Some soyoil mills are idled by soybean shortages or surplus soybean meal. For the moment, crush margins for imported soybean futures on Dalian exchange are negative, and bulk oils remain bullish on fundamentals. Soybean oil futures stay above the previous close despite a further fall on Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil mostly stop the decline and turn to stabilize, giving a boost to cottonseed oil market. However, cottonseed oil is offered higher but traded lower due to sluggish demand currently, in subdued trade. It is predicted that short-term cottonseed oil market may follow bulk oils to move with fluctuations.

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 soybean crush further declines this week due to soybean shortages and swollen meal inventory, and soybean oil, palm oil and rapeseed oil stocks are all lower than this time in previous years. Moreover, crush margins for imported soybeans on Dalian are at heavy loss at present. Hence, fundamentals are still bullish in the oils market, which is lending support to sunflower oil market. But there exist risks in policy control. Besides, Southeast Asian producers will also see a seasonal rise in palm oil output, and Chinese investors have cooler risk appetite sentiment under volatile financial markets. And more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. On the whole, short-term sunflower oil market is predicted to fluctuate at the high level in the short term.

Corn oil: Corn oil prices are steady with a partial decline in China today. Grade I corn oil is 11,500-11,800 CNY/tonne, down 100-300 CNY. (Shandong 11,500-11,800 CNY, down 300; Hebei 11,500; Liaoning 11,500, down 100; and Sichuan no offer); and crude corn oil is offered at 9,850-10,200 CNY/tonne, down 1,000 CNY. (Henan 10,200; Hebei 9,850-10,200; Inner Mongolia 9,800, down 1,000; 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. 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)