Today (Apr 16), 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 keep unchanged and in part 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 firmed on Thursday on a strong demand forecast, and oils futures keep an uptrend on China’s Dalian Commodity Exchange today, led by palm olein futures. In the spot markets, palm oil goes up 150-170 CNY/tonne and soybean oil up 40-80 CNY.

BMD palm oil kept its strength on strong Malaysian palm oil exports in the first half of April and continued gains in crude oil. Currently, domestic soybean oil stocks have fallen to 590,000 tonnes, and port edible palm oil and rapeseed oil inventories also stay lows for this time in years. Crush margins for imported soybeans on Dalian are also facing a loss scenario. Hence, fundamentals are still bullish in the market. Add to that, U.S. soybean prices keep rallying and return to stand above the 1,400 cents market, which is also lending support to domestic oils market. However, China may bring in 27.6 mln tonnes of soybeans from April to June amid the ongoing marketing season for soybeans from South America. And as for the result of auctions in China, soybean oil was only 30% traded on April 15 and rapeseed oil was even all unsold, thus weakening bullish confidence in the market. Besides, Southeast Asian producers will also see a seasonal rise in palm oil output. These may constrain short-term upward space in the oils market, so it is necessary to avoid risks of frequent fluctuations. It is suggested to keep light stockpiles in the short run.

Soybean oil: GB Grade I soybean oil is offered at 9,280-9,330 CNY/tonne in domestic coastal areas, up 40-80 CNY/tonne. (Tianjin trader 9280; Rizhao trader 9240; Zhangjiagang trader 9410; and Guangzhou trader 9280-9300). 

Palm oil: RBD palm olein is mainly priced at 7,960-8,130 CNY/tonne in coastal areas, mostly up 170-180 CNY/tonne. (Tianjin trader 8130, up 170; Rizhao trader 8090-8100; Zhangjiagang trader 7960, up 170; Guangzhou trader 7970-7990, up 180; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures rose on Thursday, and rapeseed oil futures move higher after low opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 80-90 CNY to 10,880-11,120 CNY/tonne in coastal regions in thin trading.

Domestic rapeseed oil stocks fell 7% to 230,000 tonnes, soybean oil stocks shrank 4.8% to 590,000 tonnes, and palm oil stocks also stay low for this time in years, so the overall supplies are not under pressure. Moreover, net crush margins for soybeans and rapeseed are also at loss on board. Hence, rapeseed oil market is bolstered to keep its strength by bullish fundamentals. But China is forecast to bring in 27.6 mln tonnes of soybeans from April to June, and Southeast Asian producers will also see a seasonal rise in palm oil output. Therefore, rapeseed oil price will fluctuate frequently at the high level. Overall, short-term rapeseed oil market is predicted to fluctuate to strengthen at high levels.

Cottonseed oil: Cottonseed oil prices keep steady with a partial rise of 50-100 CNY/tonne in China today. 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 to stay strong in the near term.

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 may bring in 27.6 mln tonnes of soybeans from April to June amid the ongoing marketing season for soybeans from South America. And abortive auctions for soybean oil and rapeseed oil are dampening the bullish confidence in the market. Moreover, more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. But China’s edible palm oil and rapeseed oil inventories also stay lows for this time in years, and 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 in China today. Grade I corn oil is 11,500-11,800 CNY/tonne. (Shandong 11,500-11,800 CNY; Hebei no offer; Liaoning 11,200; and Sichuan no offer); and crude corn oil is offered at 9,500-10,100 CNY/tonne. (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 also rising, 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 ¥6.53)