Today is 08/08/2022

Daily Review on Markets for Oilseeds and Oils in China--4/8/2021


Today (Apr 8), the market for oilseeds and oils in China is shown as follows:




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 increase by 0.04 CNY/kg today. Cottonseed production this year is 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, short-term cottonseed price is predicted to continue fluctuating.




Summary: U.S. soybean futures fell on Wednesday on slower exports in U.S. soybeans and bumper harvests in Brazil as well as profit-taking ahead of the report. Oils futures retreat on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go down 80-140 CNY/tonne, in thin trade.


China’s soybean arrivals will reach 27 mln tonnes from April to June, as South American soybeans are flooding into the market. China is set to auction 22,000 tonnes of reserved rapeseed oil on April 9, according to an official notice on Tuesday, so there exist risks in policy control. Meanwhile, Southeast Asian producers will also see a seasonal rise in palm oil output, and BMD palm oil futures decline after MPOA said that Malaysian March palm oil production rose 30% on month. And Chinese investors have cooler risk appetite sentiment under volatile financial markets. These combine to drag down domestic oils market to ease. However, China’s soybean oil stocks further reduced by nearly 8% on week to a low level of 620,000 tonnes, as some mills were maintaining low operation rates due to soybean shortages and swelling meal inventory. And port edible palm oil and rapeseed oil stocks are also low compared to this time in previous years, and crush margins for imported soybeans on Dalian are also at loss. Hence, fundamentals in the oils market remain bullish. Domestic oils market may have little downside space in the near term, and fluctuate at the high level on the whole.


Soybean oil: GB Grade I soybean oil is mainly priced at 9,260-9,440 CNY/tonne in domestic coastal areas, a decline of 120-140 CNY/tonne. (Tianjin trader 9260; Rizhao trader 9300; Zhangjiagang trader 9440; and Guangzhou trader 9290-9310). 


Palm oil: RBD palm olein is mainly priced at 7,880-8,120 CNY/tonne in coastal areas, mostly down 80-140 CNY/tonne. (Tianjin trader 8040-8060, down 80; Rizhao trader 8120, flat; Zhangjiagang trader 7940-7960, down 110; Guangzhou trader 7880, down 140; and Xiamen no offer).


Rapeseed oil: U.S. soybean futures fell on Wednesday on slower exports in the U.S. and bumper harvests in Brazil. Rapeseed oil futures moderately decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes down 60 CNY to 10,780-11,090 CNY/tonne in coastal regions in thin trading.


China’s soybean arrivals will reach 27 mln tonnes from April to June as soybeans from South America are flooding into the market, and Malaysian palm oil output will also see a seasonal rise soon, which are curbing domestic oils market. But soybean oil, palm oil and rapeseed oil stocks are all lower than this time in previous years, and net crush margins for soybean and rapeseed oil are both negative on board. Hence, rapeseed oil prices just see small declines. Overall, rapeseed oil market will fluctuate frequently at the high level, and buyers can wait for the moment.


Cottonseed oil: Cottonseed oil prices fluctuate by 50-200 CNY/tonne in several regions of China today. And its price has yet to follow bulk oils to go up. Some soyoil mills are idled by soybean shortages or surplus soybean meal. For the moment, crush margins for imported soybean futures on Dalian exchange are negative, and bulk oils remain bullish on fundamentals, which is beneficial for oil plants to raise price. However, U.S. soybean futures edged down on Wednesday on slower export pace, Brazilian soybean bumper crop as well as profit-taking ahead of the USDA monthly report. Dalian oils futures also stop the rally and sharply fall today. In the spot market, soybean oil and palm oil decline by 80-140 CNY/tonne. Plus, cottonseed oil is offered higher but traded lower due to sluggish demand currently, in subdued trade. It is projected that short-term cottonseed oil market may follow bulk oils to fluctuate.


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.


U.S. soybean futures fell on Wednesday, and oils futures also retreat on Dalian today. Spot soybean oil and palm oil go down 80-140 CNY/tonne in domestic market today, and there exist risks of policy control now. Meanwhile, domestic sunflower oil is in weak demand and thin trade with high offers but lower transaction prices, as more downstream buyers choose corn oil as a substitute, which is also bearish to sunflower oil market. Overall, 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 11,600-11,800 CNY/tonne. (Shandong 11,500-11,800 CNY; Hebei 11,800-12,000; Liaoning 11,600; and Sichuan 11,500); and crude corn oil is offered at 9,850-10,800 CNY/tonne, down 150-200 CNY. (Henan 10,200; Hebei 9,850-10,200, down 150-200; Inner Mongolia 10,800; 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. Moreover, the cost of corn oil has fallen as corn germ prices keep declining. These are cracking down corn oil prices. Besides, it is now the off-season for oils, which is also affecting spot corn oil price. But domestic corn millers are still supporting prices due to high corn germ prices, which is bullish to the market. Overall, corn oil market in China is predicted to fluctuate to downside in the near term.


(USD $1=CNY ¥6.55)