China's soy, palm oil and rapeseed contracts surge after bullish USDA report

China's soybean oil and meal futures logged their biggest daily rise since 2023 on Monday, while rapeseed meal and palm oil contracts also jumped, following a rally in the Chicago soy complex after the release of bullish USDA crop reports.

The most-active soymeal futures (DSMcv1) on the Dalian Commodity Exchange increased 3.2% to 2,724 yuan ($371.54) per ton, its highest in over a month and its biggest daily gain since July 2023.

Dalian's soybean oil futures (DBYcv1) also gained 2.5% to 7,718 yuan per ton, the highest since Jan. 3, while palm oil futures CPO1! rose 2.7% to 8,720 yuan per ton.

On the Zhengzhou Commodity Exchange, the most active rapeseed meal futures (CRSMcv1) rose 3.3%, reaching their highest levels in six days to 2,340 yuan per metric ton.

The U.S. Department of Agriculture (USDA) last Friday projected lower-than-expected U.S. soybean production and lowered its soy ending stocks due to a dry end to the growing season, sending Chicago soybean and soyoil prices to multi-month highs.

CBOT soybeans ZS1! extended gains Monday after rising 2.6% in the previous session. Soybean oil ZL1! also gained 6.6% on Friday.

Forecasts of tighter oilseed and vegetable oil supplies could drive up prices of competing edible oil products as they vie for a larger share of the global market.

Concerns over tightening global vegetable supplies are also heightened after Malaysia, the world's second-largest palm oil producer, reported on Friday that its inventories fell for a third consecutive month in December to hit their lowest since May 2023, as output dropped due to floods.

"China's soybean, rapeseed and palm oil prices have all increased, but as Spring Festival approaches, some enterprises are preparing to take a holiday and market transactions will gradually decrease," Xuan Dongshuang, analyst at research firm Sublime China Information said.

China's markets will be closed from Jan. 28 to Feb. 4 for the week-long Spring Festival holidays.

The world's largest soybean buyer imported a record 105.03 million tons of the oilseed in 2024 as buyers concerned about rising U.S.-China trade tensions rushed to secure U.S. supplies ahead of President-elect Donald Trump's inauguration.

($1 = 7.3316 Chinese yuan renminbi)