Today (Apr 23), 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 mostly increase by 0.02-0.11 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, affected by an ascent in both oils and meals, cottonseed price is predicted to fluctuate at the high level in the near term.

Oils: 

Summary: U.S. soybean futures extended sharp gains on Thursday as concerns about tightening global supplies triggered short-covering and fund-driven buying. Oils futures continue rising but post far smaller gains that U.S. soybeans on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go up 20-90 CNY, both in thin trade.

A strong trend in global vegetable oils prices is bringing a price comparison effect to domestic oils. China’s port palm oil and commercial soybean oil stocks are at lows for this time in years, and 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. Besides, crush margins for soybeans keep at loss in the wake of sharp gains in U.S. soybeans, so that domestic millers have stronger sentiment to raise price. Domestic oils market will keep its strength overall on bullish factors. However, Chinese crushers have ramped up soybean crush to nearly 1.80 mln tonnes this week and will to over 1.80 mln tonnes next week, and May soybean arrivals at ports will exceed 10 mln tonnes. Meanwhile, there is technical over-buying in the wake of a sharp rally in U.S. soybeans. These may add to fluctuations in the market. Participants are suggested to keep balance in buying and selling, but not to chase after excessively high price.

Soybean oil: GB Grade I soybean oil is offered at 9,460-9,730 CNY/tonne in domestic coastal areas, mostly up 20-90 CNY/tonne. (Tianjin trader 9630; Rizhao trader 9600; Zhangjiagang trader 9730; and Guangzhou trader 9460). 

Palm oil: RBD palm olein is mainly priced at 8,380-8,550 CNY/tonne in coastal areas, mostly up 20-90 CNY/tonne. (Tianjin trader 8550, up 40; Rizhao trader 8540-8550, up 70; Zhangjiagang trader 8430, up 70; Guangzhou trader 8380, up 90; and Xiamen 8520, up 20).

Rapeseed oil: U.S. soybean futures continued sharp gains on Thursday, and rapeseed oil futures also extend gains on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes up 30-60 CNY to 11050-11380 CNY/tonne in coastal regions in thin trading.

China’s rapeseed oil stocks fell 0.5% to 229,000 tonnes, soybean oil stocks down 3.3% to 570,000 tonnes, and palm oil stocks down 4% to 420,000 tonnes last week. 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 may bring in 10.7 mln tonnes of soybeans in May, and weekly soybean crush will also return to a normal level of 1.80 mln tonnes this week and next week. 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 China stay stable with a partial increase of 100-200 CNY/tonne today. U.S. soybean futures skyrocketed on Thursday on short covering and large buying trigged by concerns over global tight supply. China’s Dalian oils futures also continue the gains today but underperform US soybean. In the cash market, soybean oil and palm oil advance by 20-90 CNY/tonne. Crush margins for imported soybean futures continue to be negative on China’s Dalian exchange after steep rises in US soybeans, 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. Dominated by supportive factors, bulk oils take an uninterrupted rise. Hence, short-term cottonseed oil market will also fluctuate to stay strong.

Sunflower oil: Sunflower oil prices steady and some mixed 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 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. But U.S. soybean futures continued sharp gains on Thursday as concerns about tightening global supplies triggered short-covering and fund-driven buying, and Dalian oils futures also extend gains today. In addition, the cost of importing sunflower oil is also lifted by a rise in Ukrainian sunflower oil prices. Overall, short-term sunflower oil market is predicted to fluctuate at the high level in the short term.

Corn oil: Corn oil prices steady in China today. Grade I corn oil is 11,000-11,500 CNY/tonne. (Shandong 11,000-11,600 CNY; Hebei 10,700; Liaoning no offer; 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, crush margins for imported soybeans are at loss in the wake of sharp gains in U.S. soybean price, so domestic millers have stronger sentiment to hike price. 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)