Today (Apr 26), 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 further increase by 0.01-0.06 CNY/kg in some regions of China 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. Bulk oils take sharp losses today, which may negatively impact the short-term uptrend of cottonseed market.
Oils:
Summary: U.S. soybean futures are further higher on Monday on tight supplies. Oils futures plunge soon after a sharp rally in early trade and close midday drastically lower. In the spot markets, soybean oil and palm oil go down 130-210 CNY/tonne, in thin trade.
India has almost lost control of the pandemic as the country reports more than 300,000 new daily cases for four straight days very recently, and this has triggered concerns about the demand for edible oils from this global biggest buyer; hence, BMD palm oil futures prices were lower both last Friday and today. Furthermore, China may bring in 10.7 mln tonnes of soybeans in May as soybean shipments speed up in Brazil. And domestic soybean oil stocks started to rise last week as millers picked up soybean crush to nearly 1.80 mln tonnes, which will pass 1.80 mln tonnes this week. Besides, China will continue to auction rapeseed oil from its reserves this Tuesday. These together are weighing on the oils market to ease today. But crush margins for imported soybeans on Dalian board are negative in the wake of a sharp rise in U.S. soybean price, so domestic millers are supporting prices. This will help constrain the downside space in oils market. Short-term oils market is will follow futures to fluctuate and adjust at the high level, and buyers can stay on the sidelines temporarily.
Soybean oil: GB Grade I soybean oil is offered at 9,350-9,540 CNY/tonne in domestic coastal areas, a decline of 130-180 CNY/tonne. (Tianjin trader 9500-9530; Rizhao trader 9540; Zhangjiagang trader 9570; and Guangzhou trader 9350-9370).
Palm oil: RBD palm olein is mainly priced at 8,250-8,450 CNY/tonne in coastal areas, mostly down 150-240 CNY/tonne. (Tianjin trader 8420, down 210; Rizhao trader no offer; Zhangjiagang trader 8290, down 240; Guangzhou trader 8250-8270, down 200; and Xiamen 8450, down 150).
Rapeseed oil: U.S. soybean firmed last Friday, but rapeseed oil futures plunge after rushing higher in early trade and end sharply lower in mid-session on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil price is offered lower by 190-240 CNY at 11,050-11,390 CNY/tonne, in thin trade.
The consumption on rapeseed oil is also affected by its huge price spread with soybean oil and palm oil, so domestic rapeseed oil stocks rose 7% to 245,000 tonnes last week. And China may bring in 10.7 mln tonnes of soybeans in May as soybean shipments speed up in Brazil. While global major producers will see a seasonal rise in palm oil output in the second quarter, the pandemic outbreak in top edible oil consumer India has fueled concerns about the demand. Hence, domestic oils market eases to adjust today. But crush margins for soybean and rapeseed are at heavy loss, and domestic millers may purchase smaller-than-expected quantities of rapeseed in June-August; hence, the pattern is still bullish. Overall, short-term rapeseed oil market is predicted to fluctuate and adjust at the high level, and buyers can wait for the moment.
Cottonseed oil: Cottonseed oil prices in China stay stable with a partial increase of 100 CNY/tonne today. Crush margins for imported soybean futures continue to be negative on China’s Dalian exchange after a steep rise in US soybeans. Bulk oils prices soared last week, boosting cottonseed oil to follow gains. Oils futures bump up in early trade but soon take a dive, and closed sharply lower at noon market. In the cash market, soybean oil and palm oil slump by 130-210 CNY/tonne. Besides, cottonseed oil is offered higher and traded lower due to bleak demand now, in subdued trade. Buyers should keep a lookout at the risk of fluctuations in cottonseed oil in the wake of sharp losses in bulk oils.
Sunflower oil: Sunflower oil prices steady in China today. Grade I imported refined sunflower oil is offered at 11,900-14,300 CNY/tonne; and crude sunflower oil is not offered.
India has almost lost control of the pandemic as the country reports more than 300,000 new daily cases for four straight days very recently, and this has triggered concerns about the demand for edible oils from this global biggest buyer. And in China, more downstream buyers choose corn oil as a substitute, which is also negative to sunflower oil market. However, crush margins for imported soybeans on Dalian board are negative in the wake of sharp rises in U.S. soybeans, so domestic millers are supporting prices. 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.
Corn oil: Corn oil prices are stable in China today. Grade I corn oil is 11,000-11,500 CNY/tonne. (Shandong 11,000-11,600 CNY; Hebei 10,700; Liaoning 11,300; and Sichuan 11,300); and crude corn oil is offered at 9,700-10,100 CNY/tonne. (Henan 10,100; Hebei 9,700-10,000; Inner Mongolia 10,000; 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. This 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)