Today (Mar 8), the market for oilseeds and oils in China is shown as follows:
Oilseeds:
Imported soybean: Imported soybean supply keeps increasing at domestic ports, but the market demand is tepid and downstream buyers are not active, so holders are weak in hiking prices. But U.S. soybean futures remain strong on slow soybean harvests in Brazil under unfavorable weather conditions, so that domestic import cost keep climbing, which is supporting imported soybean market. In a hybrid of the bull and the bear, short-term imported soybean market will be little changed. Participants can keep an eye on imported soybean arrivals and demand in China.
Cottonseed: Cottonseed prices in China increase by 0.02-0.08 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. However, cottonseed crushing mills keep facing losses on account of excessive growth in cottonseed price. In this case, they 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. It is expected that cottonseed market may keep range-bound in a near term but still stay relatively strong on the whole.
Oils:
Summary: U.S. soybean futures soared last Friday on concerns about weather conditions in South America and on strong crush demand for U.S. soybean and its tight supplies. Crude oil futures surged to hit the highest since 2019 as OPEC unexpectedly said to extend current reduction through April. Oils futures also sharply jump on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes up 280-340 CNY and palm oil up 230-280 CNY/tonne. The market is in thin trade as buyers remain cautious.
Soybean crush did not pick up much as expected as soybean cargo unloading was disrupted by port congestion at Rizhao Port, Shandong and as some mill were in a lack of beans. Some mills have a plan for downtime in March and April as soybean vessels at ports are forecast to be only 6.2 mln tonnes in March, and soybean crush is expected to decline this week. At the same time, the market demand is recovering. China’s soybean oil stocks have fallen 2% weekly further to 830,000 tonnes now, and domestic palm oil stocks at ports and rapeseed oil stocks in coastal regions are also lower than this time in previous years. Meanwhile, U.S. Senate has passed the $1.9 trillion stimulus package, so the global liquidity is ample and funds are bullish about the commodity market, especially in tight oils market. Besides, meal prices are weak now due to the rise of the African swine fever, so traders are active in arbitraging by long oils and short meals. Hence, there is a myriad of bullish factors in the market. Overall, short-term oils market is predicted to keep a strong trend.
Soybean oil: GB Grade I soybean oil is mainly priced at 10,200-10,440 CNY/tonne in domestic coastal areas, a rise of 280-340 CNY/tonne. (Tianjin traders 10,200-10,220; Rizhao traders 10,250; Zhangjiagang traders 10,440; and Guangzhou traders 10,320-10,370).
Palm oil: RBD palm olein is mainly priced at 8,270-8,370 CNY/tonne in coastal areas, mostly up 230-280 CNY/tonne. (Tianjin traders 8,370, up 280; Rizhao traders not available; Zhangjiagang traders 8,310, up 260; Guangzhou traders 8,270-8,320, up 230; and Xiamen not available).
Rapeseed oil: U.S. soybean futures rose last Friday. Rapeseed oil futures hit the limit-up on China’s Zhengzhou Commodity Exchange today on negative domestic crush margins due to tight supply of old rapeseed stocks in Canada and on talks that several domestic oil mills wash out Australian rapeseed one vessel each for March and April. Spot rapeseed oil prices settle up 510-540 CNY at 11,450-11,680 CNY/tonne in coastal regions in tepid trading.
Domestic oils supplies are not under pressure, and rapeseed oil stocks fell 10% to 169,000 tonnes last week. And some soybean crushers will suspend production periodically in March, as soybean vessels arriving at domestic ports are forecast to be only 6.2 mln tonnes in the month. In addition, next crush margins for U.S. soybeans are at loss on Dalian. Besides, U.S. Senate has also passed the $1.9 trillion stimulus package, so funds are active in going long due to a bearish outlook for U.S. dollar. Rapeseed oil is predicted to strengthen at the high level in the near term.
Cottonseed oil: Cottonseed oil prices grow by 100-300 CNY/tonne in China today. U.S. soybean future surged on Friday on strong demand for soybean crushing and tight supplies. Crude futures jumped and touched their loftiest since 2019. Oils futures are also skyrocketing on Dalian Commodity Exchange today. In the spot market, soybean oil surges by 280-340 CNY/tonne and palm oil mostly represents an increase of 230-280 CNY/tonne. The oils remain bullish on fundamentals. Besides, soybean arrivals are forecast to be 6.2 mln tonne in March, making many crushing mills idled during the month of March and April. At the moment, soybean oil stocks have declined by 2% weekly to 830,000 tonnes. And palm oil and rapeseed oil stockpiles are also lower than the level in corresponding period in former years. Thus, the overall oils market will continue the strength in the near term. In addition to this, a majority of oil plants have yet to resume the operation, which boosts cottonseed oil price. It is projected that cottonseed oil market will follow bulk oils to maintain a strong uptrend in a short term.
Sunflower oil: Sunflower oil prices are mostly stable with a partial rise in China today. Grade I imported refined sunflower oil is offered at 12,300-13,200 CNY/tonne.
U.S. soybean surged last Friday, and crude oil prices jumped to the highest since 2019 after OPEC and its oil-producing allies unexpectedly said the group would keep production largely steady through April. Dalian oils futures also soared today, and spot soybean oil goes up 20-340 CNY/tonne and palm oil up 230-280 CNY. And sunflower oil import cost has been lifted as the reduction in Ukrainian sunflowerseed production has pushed higher prices. These are supporting sunflower oil market. In the near term, sunflower oil market in China is predicted to keep a strong trend.
Corn oil: Corn oil prices continue a rise in China today. Grade I corn oil price is 11,500-12,000 CNY/tonne, up 500-700 CNY/tonne. (Shandong 12,000 CNY, up 700; Hebei no offers; Liaoning 11,500; and Sichuan 11,800, up 500); and crude corn oil is offered at 10,000-10,500 CNY/tonne, up 100 CNY. (Henan 10,000, up 300 CNY; Hebei 10,500; and Inner Mongolia 10,000).
The processing cost for corn oil remains high under high feedstock corn germ prices, and corn germ is in tight supplies, so oil millers have strong sentiment to support prices. And sunflower oil prices also keep firm, which is bullish to corn oil market. But downstream buyers tend to wait after corn oil prices increase to such high levels, which is negative to the market. Overall, short-term corn oil market is predicted to maintain a strong trend in China.
(USD $1=CNY ¥6.48)