Today (Apr 12), 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 drop by 0.05 CNY/kg today. Cottonseed production this year has been 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 move with fluctuations.

Oils: 

Summary: U.S. soybean futures eased last Friday after the USDA released its April report, and oils futures fluctuate to decline on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil fluctuates by 20-40 CNY/tonne, and palm oil mostly down by 30-80 CNY, both in thin trade.

U.S. soybean futures prices fall below the 1,400 cents mark as South American soybeans are flooding into the market and on a bearish USDA monthly report, and this is going to weaken the cost support for soybean oil in China. And China’s soybean arrivals will reach 27 mln tonnes from April to June. In addition, Southeast Asian producers will also see a seasonal rise in palm oil output, and a MPOB report today shows that Malaysian palm oil stocks are well above the forecast. Funds’ sentiment for long positions are thus restrained, so that Dalian oils expand losses in afternoon trade. However, China’s soybean oil stocks continued a decline as the crush further fell by 12% to 1.35 mln tonnes last week, and edible palm oil stocks at ports and rapeseed oil stocks are both 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. Short-term oils prices may retreat to adjust, but downside space may also be limited. Buyers can wait for the moment.

Soybean oil: GB Grade I soybean oil is offered at 9,210-9,380 CNY/tonne in domestic coastal areas, mostly fluctuating and mixed by 20-40 CNY/tonne. (Tianjin trader 9210; Rizhao trader 9240; Zhangjiagang trader 9380; and Guangzhou trader 9230-9250). 

Palm oil: RBD palm olein is mainly priced at 7,720-7,930 CNY/tonne in coastal areas, mostly down by 30-40 CNY/tonne. (Tianjin trader 7900-7910, down 30; Rizhao trader 7930; Zhangjiagang trader 7790, down 40; Guangzhou trader 7720-7740, down 30; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures fell last Friday on bearish data in USDA supply and demand report, and rapeseed oil futures fluctuate to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes down 50-70 CNY to 10,780-11,090 CNY/tonne in coastal regions in thin trading.

Brazilian producers are marketing soybeans at a brisker pace, so China’s soybean arrivals are expected to reach 27 mln tonnes in April-June. And Southeast Asian producers will also see a seasonal rise in palm oil output, and a MPOB report today shows that Malaysian palm oil stocks are well above the forecast. Funds’ sentiment for long positions are thus restrained, so that domestic oils expand losses in afternoon trade. But China’s rapeseed oil stocks were 7.14% lower to 230,000 tonnes last week, and soybean oil and palm oil stocks are also lower than this time in previous years. In addition, 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. These are limiting the decline in rapeseed oil price. Overall, rapeseed oil market is predicted to fluctuate to decline and adjust in the short term, and buyers can stay on the sidelines.

Cottonseed oil: Cottonseed oil prices mainly keep steady and partly fluctuate by 50 CNY/tonne in China today. Some soyoil mills are idled by soybean shortages or surplus soybean meal, so operation rates remain at a low level. For the moment, crush margins for imported soybean futures on Dalian exchange are negative, and bulk oils remain bullish on fundamentals. But Malaysia palm oil stocks report looks bearish. Oils futures fluctuate to fall on Dalian Commodity Exchange today. In the spot market, palm oil mostly represents a decrease of 30-80 CNY/tonne. Additionally, 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 fluctuate to edge down.

Sunflower oil: Sunflower oil prices steady with a partial decline 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 prices fell below the 1,400 cents mark as South American soybeans are flooding into the market and on a bearish USDA monthly report, and this is going to weaken the cost support for soybean oil in China. And more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. But 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. 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 200 CNY. (Shandong 11,500-11,800 CNY; Hebei no offer; Liaoning 11,300, down 200; and Sichuan 11,500); and crude corn oil is offered at 9,500-10,000 CNY/tonne, down 50 CNY. (Henan 10,200; Hebei 9,800-10,000; Inner Mongolia 9,800; 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, so that spot corn oil prices are declining. Besides, the slack season for oils now is also affecting spot prices. But corn germ prices are still at high levels, and sunflower oil, the rival of corn oil, also sees a decline in price under pressure. These may bring some bullish sentiment to the market. Overall, corn oil market in China is predicted to fluctuate to downside in the near term.

(USD $1=CNY ¥6.56)