Soybean Oil and Palm Oil Prices Bottom Out

Beginning in mid-July, the soybean oil and palm oil market bottomed out. On July 13, the average market price of soybean oil was 9,382 CNY/ton. On the 18th, the average market price of soybean oil was 10,070 CNY/ton, up 7.33%. On July 13, the average market price of palm oil was 9,070 CNY/ton. On July 18, the average market price of palm oil was 9,550 CNY/ton, up 5.29%.

Since mid-July, the amount of imported soybeans arriving at the port has decreased, and the port inventory of imported soybeans has decreased. The national port inventory of imported soybeans has been in the first line of 7 million tons, a decrease of 0.19% from the previous month. According to customs data, in June, the import volume of edible vegetable oil decreased. In June, the import volume of edible vegetable oil in my country was 254,000 tons, and from January to June, it was 1.881 million tons, a year-on-year decrease of 67.5%. Supported by multiple bulls, the soybean oil and palm oil market bottomed out. On July 18, soybean oil and palm oil futures rose, and the spot followed the disk. The price of soybean oil rose by 3.07% in a single day, and the price of palm oil rose by 5.29% in a single day.

U.S. soybeans are in the growing season, the weather speculation is still the subject, and there is still room for growth in soybean oil and palm oil.

CITIC Futures analysis believes that in the short term, the growth rate of U.S. soybeans will increase by 3% month-on-month, and the weather market still exists, and new crops are likely to increase production. It is expected to continue to grow; secondly, the epidemic in China is under control, and consumption may continue to improve after the resumption of work. Indian demand may support the market. It is expected that oil will fluctuate in the historical price center position. In the long run, the growth trend of oil production in 2022 will gradually become clear, the industrial supply and demand will determine the lower price limit, and the price of crude oil and the demand for raw firewood will determine the upper price limit.

In terms of demand: India's imports in May: 1.006 million tons of oils and fats, 11.7% month-on-month, -17.1% year-on-year, including 373,000 tons of soybean oil, 36.6% month-on-month, 39.3% year-on-year; India's cumulative imports from January to May 2022: 5,192,864 tons of oils and fats , 2% year-on-year, of which 1.713367 million tons of soybean oil, 12% year-on-year. On July 15, 2022, the profit of oil imports was -513.47 CNY/ton for soybean oil, 977.03 CNY/ton for palm oil, and -436.40 CNY/ton for rapeseed oil.

In terms of demand: India's imports in May: 1.006 million tons of oils and fats, 11.7% month-on-month, -17.1% year-on-year, including 373,000 tons of soybean oil, 36.6% month-on-month, 39.3% year-on-year; India's cumulative imports from January to May 2022: 5,192,864 tons of oils and fats , 2% year-on-year, of which 1.713367 million tons of soybean oil, 12% year-on-year. On July 15, 2022, the profit of oil imports was -513.47 CNY/ton for soybean oil, 977.03 CNY/ton for palm oil, and -436.40 CNY/ton for rapeseed oil.

Fund positions and volatility: 2022/07/15 Soybean oil net orders (%) 0.39, (last week -4.85, week-on-week 5.25), soybean oil futures price is at the historical percentile of 63.30%.

Basis: On July 15, 2022, the active contract basis of soybean oil was 730 CNY/ton (+94 week-on-week), the basis of palm oil active contract was 1,458 CNY/ton (+286 week-on-week), and the basis of active rapeseed oil contract 969 CNY/ton (week-on-week +274).