Today (Apr 28), 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 part fluctuate by 0.02-0.05 CNY/kg in 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. This has offered a support to cottonseed market. But due to pricey cottonseed and persistent 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. It is expected that cottonseed price may keep strengthening with fluctuations in the near term.
Oils:
Summary: U.S. soybean futures set back on technical selling as well as profit-taking ahead of the month-end, and continue the decline on board today. Oils futures gap down widely on China’s Dalian Commodity Exchange today. In the spot markets, soybean oil and palm oil go down 120-210 CNY/tonne.
BMD palm oil futures gaped down 3% today on profit-taking. China may bring in 10 mln tonnes of soybeans monthly in May and June, as South American producers are marketing their new crops. Domestic millers keep picking up operation rates, and weekly soybean crush is returning to a normal level of 1.80 mln tonnes. Domestic oils market thus retreat today. However, domestic soybean oil and palm oil inventories are at lows this time in years now, and crush margins for imported soybeans on board are at sharp loss; hence, fundamentals are still bullish. Besides, concerns over a global inflation amid a weaker U.S. dollar is also lending potential support to the oils market. Overall, the oils market is predicted to have limited downside space in the short term and strengthen at the high level in fluctuation. Buyers can wait for low and stable prices to make appropriate replenishment.
Soybean oil: GB Grade I soybean oil is offered at 9,200-9,480 CNY/tonne in domestic coastal areas, mostly down 120-210 CNY/tonne. (Tianjin trader 9350-9400; Rizhao trader 9480; Zhangjiagang trader 9430; and Guangzhou trader 9200).
Palm oil: RBD palm olein is mainly priced at 8,140-8,330 CNY/tonne in coastal areas, mostly down 130-160 CNY/tonne. (Tianjin trader 8330-8360, down 140; Rizhao trader no offer; Zhangjiagang trader 8260, down 130; Guangzhou trader 8140-8160, down 160; and Xiamen no offer).
Rapeseed oil: U.S. soybean futures stepped back after extending a rally on Tuesday on profit-taking and continue a sharp decline on board today, with the most-active July contract falling below the 1,500 cents mark. Rapeseed oil futures fluctuate to decline on China’s Zhengzhou Commodity Exchange today. Spot rapeseed oil price is offered higher by 90-180 CNY at 10,940-11,170 CNY/tonne, in thin trade.
Domestic rapeseed oil stocks started to rise last week, and soybean crush is expected to top 1.80 mln tonnes this week. Moreover, the consumption on rapeseed oil is also affected by its huge price spread with soybean oil and palm oil. But crush margins for rapeseed are at heavy loss, and domestic millers may purchase smaller-than-expected quantities of rapeseed in June-August. This is curbing the decline in rapeseed oil price, so the overall pattern remains strong. In the short term, rapeseed oil market is predicted to follow futures to fluctuate and adjust at the high level.
Cottonseed oil: Cottonseed oil prices in China stay stable with a partial fluctuation of 50-200 CNY/tonne today. At the moment, China’s domestic soybean and palm oil stockpiles still stay at low levels compared to the corresponding period in former years, and crush margins for imported soybean on Dalian are at substantial losses. Oils thus remain bullish on fundamentals. Moreover, concerns over global inflation due to weaker US dollar bring a potential support for oils market. But U.S. soybean futures significantly fell on profit-taking. Oils futures gap down and widely fall on Dalian Commodity Exchange today. In the spot market, soybean oil and palm oil plummet 120-210 CNY/tonne. Additionally, crushing mills mostly fulfill previous contracts due to current sluggish demand for cottonseed oil. And cottonseed oil is offered higher and traded lower, in subdued trade. It is expected that short-term cottonseed oil price 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.
U.S. soybean futures set back on technical selling as well as profit-taking ahead of the month-end, and continue the decline on board today. Dalian oils futures gap down today, and spot soybean oil and palm oil both decline. And more domestic 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 to decline marginally.
Corn oil: Corn oil prices are stable with a partial decline in China today. Grade I corn oil is 10,800-11,600 CNY/tonne, down 200 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 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. And domestic millers are mainly digesting their stocks amid the slack season for oils, which is also affecting spot prices. 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)