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Daily Review on Markets for Oilseeds and Oils in China--4/19/2021

2021-04-19 www.cofeed.com

Today (Apr 19), the market for oilseeds and oils in China is shown as follows:

 

Oilseeds:

 

Imported soybean: China may bring in 27 mln tonnes of soybeans from April to June, as Brazil is now marketing and exporting soybeans at a brisker pace. And domestic downstream buyers inactive in purchase due to declining prices, so that the demand for imported soybeans is not strong and port shipments also remain tepid. These are negative to domestic imported soybean market. However, high-level U.S. soybean prices are lending support to the cost side for imported soybeans. In a hybrid of the bull and the bear, imported soybean market in China is predicted to fluctuate with a weakening trend in the short run.

 

Cottonseed: Cottonseed prices in China mainly keep unchanged and in part fluctuate by 0.01-0.04 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 extended gains last Friday on intense competition for spring platng acreage between soybean and corn and as the cold, dry weather in the U.S. Midwest might be adverse to the start of the planting, couple with a weaker U.S. dollar. Oils futures continue rising but are narrowing down gains on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil partially goes up 30-80 CNY/tonne and palm oil fluctuates by 10-30 CNY. The trade remains thin as buyers are cautious.

 

China’s soybean oil stocks fell for a 8th straight week to less than 580,000 tonnes, and port edible palm oil and rapeseed oil stocks are also at lows for this time in years. Meanwhile, rally U.S. soybean futures prices are also leading to a loss scenario in crush margins for imported soybeans on Dalian board. Hence, these bullish fundamentals are 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 Chinese crushers will continue picking up operation rates in the coming two weeks. Palm oil production in main producing countries will see a rise entering the second quarter. These may constrain short-term upward space in the oils market, and the market will fluctuate to keep its strength on the whole. As Dalian futures are slowing down gains now, buyers are suggested to keep light stockpiles.

 

Soybean oil: GB Grade I soybean oil is offered at 9,260-9,460 CNY/tonne in domestic coastal areas, partially up 30-80 CNY/tonne. (Tianjin trader 9260-9280; Rizhao trader 9350; Zhangjiagang trader 9460; and Guangzhou trader 9280). 

 

Palm oil: RBD palm olein is mainly priced at 7,900-8,120 CNY/tonne in coastal areas, fluctuating by 10-60 CNY/tonne. (Tianjin trader 8090-8110, down 10; Rizhao trader 8120, up 30; Zhangjiagang trader 7940, flat; Guangzhou trader 7900-7920, down 60; and Xiamen 8000, down 30).

 

Rapeseed oil: U.S. soybean futures closed higher last Friday, but rapeseed oil futures move lower after high opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes down 50 CNY to 10,830-11,070 CNY/tonne in coastal regions in thin trading.

 

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 palm oil production in main producing countries will see a rise seasonally. These are weighing on domestic oils market. But domestic rapeseed oil stocks fell 0.5% to 229,000 tonnes, and soybean oil and palm oil stocks also stay low for this time in years. In addition, net crush margins for soybeans and rapeseed are also at loss on board. Therefore, the decline in rapeseed oil price is small. Overall, short-term rapeseed oil market is predicted to fluctuate and adjust at the high level, and buyers can keep light stockpiles.

 

Cottonseed oil: Cottonseed oil prices mostly increase by 50-100 CNY/tonne in China today. Oils futures further go up but gradually narrow their gains on Dalian Commodity Exchange today. In the cash market, soybean oil partly sets an advance of 30-80 CNY/tonne and palm oil fluctuate by 10-30 CNY/tonne. An uninterrupted rise in U.S. soybean futures has led to existing losses in crush margins for imported soybean futures on China’s Dalian exchange, so bulk oils remain bullish on fundamentals. But cottonseed oil is offered higher but traded lower due to sluggish demand, in subdued trade. Moreover, China’s soybean arrivals in April-June could bump up to 27.60 mln tonnes as the marketing season for South American soybean is in full swing now. This will limit the upward momentum for oils market. It is predicted that short-term cottonseed oil market may follow bulk oils to keep strengthening with fluctuations.

 

Sunflower oil: Sunflower oil prices steady with a partial decline in China today. Grade I imported refined sunflower oil is offered at 12,000-14,300 CNY/tonne; and crude sunflower oil is not offered.

 

China may bring in 27.6 mln tonnes of soybeans from April to June, and Chinese crushers will continue picking up operation rates in the coming two weeks. Palm oil production in main producing countries will see a rise entering the second quarter. These may constrain short-term upward space in the oils market. In addition, auction for national oils reserves is also weakening the bullish sentiment in the market. Moreover, more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. However, Ukraine sunflower oil prices are rising amid a rise in global crude oil and vegetable oil prices, so that import cost has been lifted for Chinese importers. 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 and some mixed in China today. Grade I corn oil is 11,200-11,500 CNY/tonne. (Shandong 11,500 CNY; Hebei no offer; Liaoning 11,200; and Sichuan 11,400); and crude corn oil is offered at 9,800-10,100 CNY/tonne, fluctuating by 200-300 CNY. (Henan 10,100; Hebei 9,800-10,000, fluctuating by 200-300; 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, and sunflower oil, the rival of corn oil, also sees a decline in price under pressure. But corn germ prices are rising, thus lending support to the cost side, which 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 ¥6.52)