Back
【 Market Review 】 With the increasingly fierce competition between long and short positions in the market, the price of palm oil rebounded significantly again last week, and even increased its holdings and rose. In terms of fundamentals, the international palm oil supply is still tight, and the support for domestic palm oil is still considered strong; Recently, due to the rhythm of soybean arrival at the port, the operation and pressing of oil factories have been affected to some extent, resulting in a short-term tightening of domestic soybean oil supply. However, the long-term loose pattern of raw material supply and good pressing profit will continue to constrain the space above soybean oil; The increasingly awkward export tightening in Canada has led to a continuous decrease in its costs, which has also suppressed domestic vegetable oil prices. In the face of import profits, there have been sporadic purchases of ships for domestic vegetable oil, further limiting the upward space of vegetable oil prices.
【 Supply and Demand Analysis 】 Palm Oil: Due to the continuous inversion of import profits in China, the supply has remained tight. As delivery is about to begin and expectations of a return to cash flow are high, the price fluctuations of domestic palm oil have increased, and the ability to rise prices is relatively good. The consumer side has always maintained a level of essential demand without any outstanding performance, so inventory has remained at a low level due to limited arrival at the port. The price has always been strongly supported due to tight supply, and there is a possibility of further strengthening in price expectations due to continued production cuts in subsequent production areas.
Soybean oil: Due to the abundant supply of imported soybeans in China, the crushing has remained high, but the consumer side is unable to effectively digest such a large supply. As a result, domestic soybean oil inventories have been hovering at a high level. High inventory levels have suppressed soybean oil prices, coupled with the decline in international soybean and soybean oil prices. Despite good import profits, the supply of raw materials and finished products has remained abundant in the short and long term in China, ultimately limiting the upward potential of soybean oil prices. In the increasingly extreme situation of supply expectation differentiation, the price difference between soybean and brown has also reached an extreme level. With the short-term weakening expectation of soybean arrival and crushing, there is a possibility of marginal tightening of short-term supply, and there is a possibility of a pullback in soybean oil inventory. Under the reduced pressure and the expectation of reserve inventory during the subsequent seasonal consumption peak season, there is a possibility of upward replenishment of soybean oil, while slightly narrowing the price difference with other oils and fats.
Rapeseed oil: Although the import and pressing of rapeseed oil may be affected to some extent due to the uncertain relationship between China and Canada, it has not yet directly restricted the import of rapeseed oil. Therefore, there is still a good entry window for the supply of rapeseed oil in China. However, due to the imposition of export tariffs on imported vegetable oil by Russia, the country's profit margin for imported vegetable oil has correspondingly declined, and the increase in import costs has led to stronger support for domestic vegetable oil prices. In the future, it is necessary to pay attention to whether there is an opportunity for easing trade cooperation between Canada and the United States. If Canada's consumption of vegetable oil exports to the United States weakens, it may lead to a decrease in its export costs to China. There are alternative import country options for domestic vegetable oil supply, and supply concerns are limited. Vegetable oil prices still fluctuate within the current range.
Due to the upcoming month before the delivery of the 01 contract and the gradual trading reality, the monthly spread between oil and fat is considered to return to the real basis. In the case of poor consumption of palm oil spot, there is a possibility of a decline in the monthly spread in the future.
[Comprehensive viewpoint] It is recommended to pay attention to the opportunities for palm oil to converge from January to May and for the Palm 05 contract to rebound after a decline.
Chicago Board of Trade (CBOT) soybean futures strengthened on Tuesday due to short covering and bargain hunting after a previous day's decline, but gains were still limited by strong prospects for South American crops and demand concerns.
Market analysis: The spot price of soybeans in Northeast China is stable, but due to the recent snowfall weather, the purchase and sales of spot soybeans in the market have slowed down. In the southern soybean market, due to the average demand for terminal soybean products, the purchase and sales performance is not fast, and prices are running steadily.