Today (Mar 18), 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 mainly stay stable but decrease by 0.02 CNY/kg in several regions of China today. Cottonseed crushing mills keep facing losses on account of early 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. However, 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. Underpinned by tight supply of cottonseed, the downside for its market will be restricted in the short run, and cottonseed market will stay strong on the whole.
Oils:
Summary: U.S. soybean exports were cooling, and U.S. farmers were expected to enlarge planting acreage sharply this spring. Meanwhile, the weather was improving in South America, and soybean exports were at a brisker pace in Brazil. Hence, U.S. soybean futures fell on Wednesday. Oils futures open and move low to continue loss on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil goes down 70-240 CNY/tonne and palm oil down 100 CNY, both in thin trade.
A notable rise so far in March palm oil production could lead to higher monthly-ending stocks in Malaysia, but exports remain unsatisfactory. Meanwhile, Dalian futures also require certain technical corrections. Hence, the market continues to decline. But as soybean crush remain at a relatively low level as some millers are in a lack of beans and some facing swelling meal inventories, China’s soybean oil stocks also further declined nearly 10% further to 740,000 tonnes. And palm oil stocks also fell 6.5% on week to 560,000 tonnes. Therefore, fundamentals remain bullish in the market. But due to national soybean oil selling and technical adjustments, short-term oils market may continue to fluctuate to retreat and adjust.
Soybean oil: GB Grade I soybean oil is mainly priced at 9,890-10,040 CNY/tonne in domestic coastal areas, a decline of 70-240 CNY/tonne. (Tianjin traders 9890; Rizhao traders 9950; Zhangjiagang traders 10040; and Guangzhou traders 9940-9990).
Palm oil: RBD palm olein is mainly priced at 8,160-8,260 CNY/tonne in coastal areas, mostly down 100 CNY/tonne. (Tianjin traders 8260, down 100; Rizhao traders not available; Zhangjiagang traders 8210, down 100; Guangzhou traders 8160-8190, down 100; and Xiamen not available).
Rapeseed oil: U.S. soybean futures fell on Wednesday on declining export demand for U.S. soybeans and improving weather in South America. Rapeseed oil futures continue loss on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil prices settle down 190-220 CNY at 10,720-11,060 CNY/tonne in coastal regions in thin trading.
China is to sell 20,875 tonnes of crude soybean oil imported in 2019 on March 19, according to a latest official release. And traders have also completed the arbitrage of long oils and short meals. Hence, rapeseed oil prices are declining. But the overall oils market is not under supply pressure in China as stocks of soybean oil, palm oil and rapeseed oil are all lower than this time in previous years. Besides, crush margins for imported soybeans are at heavy loss on Dalian, and some domestic crushers will suspend production periodically in March and April for a lack of beans. With support at its downside, rapeseed oil market is predicted to follow futures to fluctuate to adjust at the high level in the short term and keep its strong pattern overall.
Cottonseed oil: Cottonseed oil prices further drop by 100-150 CNY/tonne in some regions of China today. U.S. soybean futures dropped on Wednesday on improved weather in South America and accelerating export in Brazil. Oils futures extend losses after low opens on Dalian Commodity Exchange today. In the spot market, soybean oil decreases by 70-240 CNY/tonne and palm oil falls by 100 CNY/tonne.
Some cottonseed oil plants mainly fulfill previous contracts amid weak demand from market, which drags down cottonseed oil price. But there will be a period of downtime for many soyoil mills due to shortages of soybeans. In this case, soybean oil stocks further dwindle by nearly 10% to around 740,000 tonnes. Likewise, palm oil stockpiles are 6.5% lower at 560,000 tonnes. Hence, oils remain bullish on fundamentals. Besides, a majority of oil plants are idled currently, which boosts cottonseed oil price. It is predicted that cottonseed oil market will follow bulk oils to edge down in the short run but still maintain the high level on the whole.
Sunflower oil: Sunflower oil prices steady with a partial decline in China today. Grade I imported refined sunflower oil is offered at 13,500-14,300 CNY/tonne; and crude sunflower oil is 12,900 CNY.
U.S. soybean futures fell on Wednesday. Dalian oils futures open and move low to extend loss today, and spot soybean oil goes down 70-240 CNY and palm oil down 100 CNY. Moreover, downstream buyers mostly move to the sidelines as sunflower oil prices stay high compared to this time in previous years. But sunflower oil import cost is still lifted by high prices in Ukraine, so that domestic millers have strong sentiment to support prices. Overall, sunflower oil market is predicted to fluctuate to decline and adjust in the short term.
Corn oil: Corn oil prices are stable in China today. Grade I corn oil price is 12,500-13,000 CNY/tonne. (Shandong 12,500-13,000 CNY; Hebei no offers; Liaoning 12,500; and Sichuan no offers); and crude corn oil is offered at 10,400-10,500 CNY/tonne. (Henan 10,400; Hebei no offers; and Inner Mongolia 10,500).
As high corn germ prices keep processing cost at a high level and also due to tight feedstock, the market has strong sentiment to support prices. And domestic sunflower oil, the rival of corn oil, also stay at high prices. These are bullish to corn oil market. But downstream buyers tend to wait after corn oil prices increase to such high levels. And Dalian oils futures open low to continue loss today and spot soybean oil goes down 70-240 CNY and palm oil down 100 CNY. These are negative to the market. Overall, corn oil market in China is predicted to fluctuate in the near term.
(USD $1=CNY ¥6.49)