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SunSirs: Agri, Soybean Meal And Vegetable Oil Market Rebound

February 07 2020 10:57:26     SunSirs (Daisy)

On February 6, the soybean meal commodity index was 84.70, up 0.97 points from yesterday, down 39.45% from 139.88 (2012-Septmber-04), the highest point in the cycle. and it is 15.96% higher than 73.04, the lowest point on April 10, 2016. (Note: cycle refers to 2011-Septmber-01 to now). 

The soybean oil commodity index on February 6 was 64.59, up 1.34 points from yesterday, down 35.74% from the highest point in the cycle of 100.51 (2011-Sepetmber-12), and up 29.13% from the lowest point of 50.02 on December 18, 2018. (Note: cycle refers to 2011-Septmber-01 to now).

On February 6, palm oil commodity index was 77.54, up 0.89 points from yesterday, down 31.31% from the highest point 112.88 (2012-April-10) in the cycle, and up 50.45% from the lowest point 51.54 on December 16, 2018. (Note: cycle refers to 2012-March-01 to now). 

On February 6, the market of soybean meal, oil and other varieties of vegetable oil dived and collectively faced in a rebound. Among them, soybean oil rebounded the most, with an average market price of 6603 RMB / ton, a daily increase of 2.11%. Palm oil market average price is 6127 RMB / ton, a daily increase of 1.16%. Soybean meal market average price is 2822 RMB/ ton, a daily increase of 1.16%.

After the spring festival, the futures market dived and soybean meal oil fell.

After the festival, soybean meal oil spot market’s decrease can be attributed to the future market. During the Spring Festival, the international vegetable oil declined. Holidays were extended, logistics was blocked, and collective gathering was forbidden, causing plummeting demand of restaurant industry. 

On the first trading day after the festival, on February 3, soybean meal oil futures fell sharply, even the main contract of soybean oil futures y2005 closed at 6040 RMB / ton, down 454 RMB / ton. The main contract of palm oil futures P2005 closed at 5676 RMB / ton, down 426 yuan / ton, while the main contract of soybean meal futures closed at 2580 RMB, down 80 yuan / ton. 

With futures market pressure, spot market followed the decline. Soybean oil spot price was more than 8% lower than before spring festival. Palm oil decline by nearly 5%. Soybean meal has less quotation, mainly focusing on contract execution.

After the futures dive, the market recovered with soybean meal and oil rising together. 

On February 3, after the sharp dive of soybean meal oil futures, soybean meal futures rose for two days and closed flat for six days, while soybean oil palm oil futures rose for two days.

On February 6, the main contract of soybean meal was 2635 RMB / ton, flat. The main contract of Lian soybean oil futures closed at 6250 RMB, up 124 yuan / ton. The main contract of Lian palm oil futures closed at 5886 RMB, up 170 yuan / ton. 

After the recovery of futures market, the spot market of soybean meal keeps rising. Due to the increase of logistics and transportation pressure, the volume of soybean meal market is relatively low, and most manufacturers do not offer. Soybean oil trading volume is also low, only some enterprises in Shandong have prices, having a high price tag. As for palm oil, only some enterprises in Guangzhou have quoted prices, most of which are temporarily not quoted, and the market turnover is limited.

Market Forecasting 

Li Bing, an analyst of agricultural products of SunSirs, believes that the rebound of soybean meal and vegetable oil market in recent two days is mainly caused by the excessive drop after spring festival. Due to the delay of soybean oil plant’s operation, and the increasing difficulty of logistics and transportation increases, the supply of soybean meal, soybean oil and palm oil is tight. After the sharp drop after the spring festival, there will be a supplementary increase. It is expected that the future market will stabilize after the supplementary increase.

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