Today (Apr 14), 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 0.02-0.05 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, it is expected that short-term cottonseed price still keeps fluctuating.

Oils: 

Summary: U.S. soybean futures rose on Tuesday on bargain buying by investment funds and as China’s March soybean imports surged 82% on year to 7.77 mln tonnes, in addition that the U.S. dollar hit a fresh three-week low. Oils futures pare gains after high opens and stay around the previous close at midday close. In the spot markets, soybean oil and palm oil fluctuate by 10-40 CNY/tonne, both in thin trade.

Domestic soybean crush saw a further weekly decline of 12% to 1.36 mln tonnes last week, so soybean oil stocks also shrank by 4.8% to 590,000 tonnes. And port edible palm oil and rapeseed oil inventories also stay lows for this time in years. Moreover, crush margins for imported soybeans on Dalian board are at heavy loss. Hence, fundamentals are still bullish in domestic oils market. Add to that, BMD palm oil futures climbed 2% higher on Tuesday on strong gains in U.S. soyoil market and as Malaysian palm oil exports rose 10-11% on month in the first 10 days of April. These are lending support to domestic oils market. However, China will likely bring in 27 mln tonnes from April to June, as South American producers are actively marketing their new crops. Besides, Chinese government said that edible oils are in ample supplies, and the country will also auction 15,915 tonnes of soybean oil from reserves this Friday. And Southeast Asian producers will also see a seasonal rise in palm oil output, and a latest MPOB report shows that Malaysian March palm oil production and stocks are well above the forecast. The bullish sentiment in the market is thus curbed. The oils market will have limited upward impetus in the short run, and will likely fluctuate frequently on the whole. Buyers are suggested to remain cautious in chasing after higher prices and keep light stockpiles.

Soybean oil: GB Grade I soybean oil is offered at 9,180-9,300 CNY/tonne in domestic coastal areas, mostly fluctuating and mixed by 10-40 CNY/tonne. (Tianjin trader 9180; Rizhao trader 9200; Zhangjiagang trader 9300; and Guangzhou trader 9200). 

Palm oil: RBD palm olein is mainly priced at 7,660-7,860 CNY/tonne in coastal areas, steadily fluctuating by 10-20 CNY/tonne. (Tianjin trader 7860, up 20; Rizhao trader 7840; Zhangjiagang trader 7730, up 20; Guangzhou trader 7660, down 10; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures rose on Tuesday, and rapeseed oil futures open high and rise on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 40-50 CNY to 10,910-11,150 CNY/tonne in coastal regions in thin trading.

China’s soybean oil, palm oil and rapeseed oil inventories all stay lows for this time in years, so domestic oils supplies are not under pressure. And crush margins for soybeans and rapeseed are at heavy loss on board, so Chinese millers may bring in smaller-than-expected rapeseed oil and soybean from June to August. These are bolstering rapeseed oil prices. In the short term, rapeseed oil market is predicted to keep its strength at the high level. But 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. Therefore, rapeseed oil prices will fluctuate frequently at the high level, and buyers are suggested to keep light stockpiles.

Cottonseed oil: Cottonseed oil prices keep steady in China today. Oils futures narrow their gains after opening high on Dalian Commodity Exchange today and hover around the previous closed at noon. In the cash market, soybean oil and palm oil fluctuate by 10-40 CNY/tonne. Crush margins for imported soybean futures on Dalian exchange remain poor now, and bulk oils remain bullish on fundamentals. But cottonseed oil is offered higher but traded lower due to sluggish demand, in subdued trade. Moreover, with an upcoming seasonal increase in palm oil production, Malaysian palm oil production and stock in March are notably higher than anticipated, according to data from MPOB. This will limit the upward momentum for short-term oils market. It is predicted that cottonseed oil market may follow bulk oils to fluctuate in the short run.

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.

China will likely bring in 27 mln tonnes from April to June, as South American producers are actively marketing their new crops. And Chinese government said that edible oils are in ample supplies. Moreover, more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. But China’s soybean oil stocks also shrank by 4.8% to 590,000 tonnes, and port edible palm oil and rapeseed oil inventories also stay lows for this time in years. Moreover, crush margins for imported soybeans on Dalian board are at heavy loss. Hence, these bullish fundamentals are also supporting sunflower oil market. Overall, 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 100-200 CNY. (Shandong 11,500-11,800 CNY; Hebei no offer; Liaoning 11,200, down 100; and Sichuan 11,300, down 200); and crude corn oil is offered at 9,500-10,100 CNY/tonne, down 100 CNY. (Henan 10,100; 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 ¥6.54)