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Daily Review on Markets for Oilseeds and Oils in China--4/20/2021

2021-04-20 www.cofeed.com

Today (Apr 20), 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 0.05 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 continue rising on Monday as growing U.S. domestic demand for soybeans under healthy crush profits led to extremely tight spot supplies and cold weather in the U.S. Midwest could slow down planting progress, coupled with a weaker U.S. dollar. Oils futures fluctuate to decline on China’s Dalian Commodity Exchange today as investors end their arbitrage due to strengthening meal price. In the spot markets, soybean oil steadily goes down 30 CNY and palm oil fluctuates by 10-40 CNY, both in thin trade.

 

China may bring in 27.6 mln tonnes of soybeans from April to June amid the ongoing marketing season in South America, and palm oil production in main producing countries will see a rise seasonally, which combine to drag down oils market to the correction territory today. However, 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, rallying 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. Overall, short-term oils market will remain resilient, albeit some fluctuations. And buyers can stay on the sidelines or keep light stockpiles.

 

Soybean oil: GB Grade I soybean oil is offered at 9,230-9,430 CNY/tonne in domestic coastal areas, partially down 30 CNY/tonne. (Tianjin trader 9280; Rizhao trader 9350; Zhangjiagang trader 9430; and Guangzhou trader 9230). 

 

Palm oil: RBD palm olein is mainly priced at 7,900-8,100 CNY/tonne in coastal areas, partially down 20 CNY/tonne. (Tianjin trader 8100, flat; Rizhao trader no offer; Zhangjiagang trader 7930, down 20; Guangzhou trader 7900-7910, flat; and Xiamen no offer).

 

Rapeseed oil: U.S. soybean futures closed higher on Monday, but rapeseed oil futures decline after low opens on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices goes down 70 CNY to 10,740-10,970 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 entering the second quarter. Besides, consumption on rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. But last week, domestic rapeseed oil stocks fell 0.5% to 229,000 tonnes, soybean oil down 3.3% to 570,000 tonnes, and palm oil down 4% to 420,000 tonnes. In addition, crush margins for soybeans and rapeseed are also at loss on board. Hence, fundamentals remain bullish in the oils market. 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 in part increase by 50 CNY/tonne in China today. An uninterrupted rise in U.S. soybean futures has caused persistent losses in crush margins for imported soybean futures on China’s Dalian exchange, so bulk oils remain bullish on fundamentals, offering a support to domestic oils market. But oils futures fluctuate to fall on Dalian Commodity Exchange today. In the cash market, soybean oil stand firm with a decline of 30 CNY/tonne and palm oil fluctuates by 10-40 CNY/tonne. For the moment, cottonseed oil is offered higher but traded lower due to sluggish demand, in subdued trade. This will limit the upward momentum for oils market. It is predicted that short-term cottonseed oil market may follow bulk oils to move with fluctuations.

 

Sunflower oil: Sunflower oil prices steady with a partial decline in China today. Grade I imported refined sunflower oil is offered at 11,800-14,300 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 in South America, and palm oil production in main producing countries will see a rise seasonally, which combine to weigh on short-term oils prices. 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 with a partial decline in China today. Grade I corn oil is 11,000-11,500 CNY/tonne, down 500 CNY. (Shandong 11,500 CNY; Hebei 11,000, down 500; 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. And rallying U.S. soybean futures prices are also leading to a loss scenario in crush margins for imported soybeans on Dalian board. Fundamentals in domestic oils market may bring some bullish sentiment to corn oil price. Overall, corn oil market in China is predicted to fluctuate to downside in the near term.

 

(USD $1=CNY ¥6.51)