Soybean, canola and palm oil contracts in China extended after US MSG report

China soybean oil and meal futures on Monday posted their biggest one-day gain since 2023. And canola meal and palm oil futures also rose amid a soybean price rally on the Chicago Board of Trade, fueled by "upbeat" U.S. MSG reports.

 

The most active soybean meal futures contract on the Dalian Commodity Exchange rose 3.2% to a monthly high of 2,724 yuan/t or $371.54/t, the biggest daily gain since July 2023.

 

Dalian soybean oil futures rose 2.5% to their highest since January 3 at 7,718 yuan/t, while palm oil (CPO1) rose 2.7% to 8,720 yuan/t.

 

On the Zhengzhou Commodity Exchange, the most active rapeseed meal futures rose 3.3%, reaching the highest level in the last six days - 2,340 yuan/t.

 

In a report on Friday, the US Food and Agriculture Organization of the United States (FAO) forecast lower-than-expected U.S. soybean production and lowered the estimate of ending stocks due to dry conditions late in the growing season, sending soybean and soybean oil prices in Chicago to multi-month highs.

 

CBOT soybean futures extended their gains on Monday after rising 2.6% on Friday, when soybean oil rose 6.6%.

 

Expectations of reduced oilseed and vegetable oil supplies could lead to higher prices for competing edible oils that are competing for their share of the global market.

 

Concerns about a global supply crunch intensified after Malaysia, the world's second-largest palm oil producer, reported that its December inventories fell for the third consecutive month to their lowest level since May 2023 due to a flood-induced drop in production.

 

"Soybean, rapeseed and palm oil prices in China have risen, but as the Chinese New Year approaches, some businesses are preparing for the holidays and market transactions are gradually decreasing," said Xuan Dongshuang, an analyst at research firm Sublime China Information. Chinese markets will be closed from January 28 to February 4 for the Spring Festival holiday.

 

China, the world's largest soybean importer, purchased a record 105.03 million tonnes of the oilseed in 2024. This was a result of importers' concerns about increasing trade tensions between the US and China, so buyers rushed to secure supplies from the US before the inauguration of President D. Trump.

 

According to the General Administration of Customs of the PRC, the volume of imports of major agricultural crops into China, including grains, legumes, and root crops, in 2024 amounted to 157.52 million tons, which is 2.3% less than in 2023. In monetary terms, imports decreased by 15.6% to 69.02 billion.

 

In 2023, China imported 161.96 million tons of major agricultural crops worth $82.29 billion, which exceeded the 2022 figure by 11.7% in volume and 1% in value.