Today (Apr 22), 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 increase by 0.02-0.07 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. Besides, oils and meals are both increasing, which leads cottonseed market to stand steady with an advance. 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. Therefore, it is expected that short-term cottonseed price still keeps fluctuating.

Oils: 

Summary: U.S. soybean futures rose to their highest since 2014 on Wednesday, bolstered by firm cash market and surging international vegetable oils prices. Oils futures continue wide gains on China’s Dalian Commodity Exchange (DCE) today. In the spot markets, soybean oil and palm oil go up at a range of 10-120 CNY/tonne, both in thin trade.

BMD palm oil continued sharp gains to a multi-year high as Malaysian April palm oil saw a rise in exports but a slight decline in output, CBOT July soybean contract kept rallying to get close to the 1500 cents mark, and DCE oils futures also extend an uptrend today, which together bring support to domestic oils market. In the meantime, China’s port edible palm oil stocks fell further by 4% weekly to 420,000 tonnes, and commercial soybean oil stocks even declined for an eighth straight week to a 570,000 tonnes low. Moreover, soybean oil stocks still have a downturn potential, as crushers in Rizhao, Shandong Province are likely to suspend production for 7-10 days from April 24th when steam supply will be affected by the maintenance of power plants. And domestic millers now have stronger sentiment to raise prices because soybean crush margins remain negative. The market has already put its focus on planting weather for U.S. soybeans under tightening supplies, so that China’s oils market will probably strengthen in the short term under high import cost. However, soybean arrivals at China’s ports are increasing amid the ongoing marketing season in South America, and Chinese crushers will continue picking up operation rates in coming two weeks. In addition, palm oil production in main producing countries will see a rise in the second quarter. These will add to fluctuations in the market. DCE oils futures are paring gains in morning session, so buyers are suggested not to chase after excessively high prices.

Soybean oil: GB Grade I soybean oil is offered at 9,440-9,680 CNY/tonne in domestic coastal areas, mostly up 10-120 CNY/tonne. (Tianjin trader 9560; Rizhao trader 9600; Zhangjiagang trader 9680; and Guangzhou trader 9440-9480). 

Palm oil: RBD palm olein is mainly priced at 8,310-8,500 CNY/tonne in coastal areas, mostly up 60-110 CNY/tonne. (Tianjin trader 8490-8500 up 110; Rizhao trader 8470, up 60; Zhangjiagang trader 8340, up 80; Guangzhou trader 8310, up 110; and Xiamen no offer).

Rapeseed oil: U.S. soybean futures jumped to hit their highest in seven years on Wednesday, and rapeseed oil futures also continue rising on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 80-110 CNY to 10,960-11,220 CNY/tonne in coastal regions in thin trading.

Inventories of soybean oil, palm oil and rapeseed oil in China are at lows for this time in years, so the overall supplies are not under pressure. And crush margins for soybeans and rapeseed are also at heavy loss. Hence, domestic millers have stronger sentiment to hike prices under bullish fundamentals, thus bolstering short-term rapeseed oil price to keep its strength. However, China will see more soybeans arriving at ports amid ongoing marketing season in South America, and Chinese crushers will continue picking up operation rates in coming two weeks. Add to that, palm oil output in main producing countries will increase in the second quarter. Besides, the consumption on rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. Hence, rapeseed oil prices will fluctuate frequently at the high level.

Cottonseed oil: Cottonseed oil prices in part increase by 100 CNY/tonne in China today. Oils futures post wide gains on Dalian Commodity Exchange today. In the cash market, soybean oil and palm oil jump by 10-120 CNY/tonne. An uninterrupted rise in U.S. soybean futures has caused persistent losses in crush margins for imported soybean futures on China’s Dalian exchange, raising crushers’ intention in lifting price, and thereby offering a support to domestic oils market. For the moment, cottonseed oil is offered higher and traded lower due to bleak demand, in subdued trade. This will potentially restrain the upward momentum of oils market. It is expected that short-term cottonseed oil market will fluctuate to stay strong following the continuous gains in bulk oils market.

Sunflower oil: Sunflower oil prices steady with a partial rise 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.

U.S. soybean futures rose to their highest since 2014 on Wednesday, bolstered by firm cash market and surging international vegetable oils prices, and Dalian oils futures also continue wide gains today. In addition, the cost of importing sunflower oil is also lifted by a rise in Ukrainian sunflower oil prices. However, China will see more soybeans arriving at ports amid ongoing marketing season in South America, and Chinese crushers will continue picking up operation rates in coming two weeks. Add to that, palm oil output in main producing countries will increase in the second quarter. These together weigh on short-term oils prices. Moreover, more downstream buyers choose corn oil as a substitute, which is also negative to 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 11,000-11,500 CNY/tonne, down 200-300 CNY. (Shandong 11,000-11,600 CNY, down 200-300; Hebei 10,700, down 300; Liaoning 11,200; and Sichuan 11,400); and crude corn oil is offered at 9,800-10,100 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, 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. Moreover, domestic commercial soybean oil stocks have been falling for a 8^th straight week to a low level of 570,000 tonnes, and port edible palm oil stocks have also dropped 4% weekly to 420,000 tonnes; hence, fundamentals remain bullish in the oils market. These may bring some support to corn oil market. Overall, corn oil market in China is predicted to fluctuate to downside in the near term.

(USD $1=CNY ¥6.49)