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SunSirs: Agriculture: Eye-Catching Performance of Palm Oil and Soybean Oil in the Fourth Quarter Thanks to Good News Supporting

December 11 2019 09:55:59     SunSirs (Daisy)

1. Price Trend

On December 9, the palm oil commodity index was 76.39, with an increase at 2.99 points from yesterday. It is 32.33% lower than the highest point in the cycle at 112.88 on April 10, 2012 and is 48.21% higher than the lowest point in the cycle at 51.54 on December 16, 2018. (Note: cycle refers to March 1, 2012 to now).

On December 9, soybean oil commodity index was 65.11, an increase at 1.27 points from yesterday. It is 35.22% lower than the highest point in the cycle at 100.51 on September 12, 2011 and it was 30.17% higher than the lowest point in the cycle at 50.02 on December 18, 2018 (Note: The cycle refers to September 1, 2011 to now).

According to data from SunSirs, in the fourth quarter, the traditional oil enters into consumption peak season. Under the positive boost of the terminal biodiesel policy news, the price of palm oil continued to increase, leading the soybean oil to go up significantly. In contrast, the market of soybean meal, rapeseed meal, pig and egg went down. Palm oil and soybean oil was very eye-catching in agricultural products. Up to December 9, the average price of palm oil was 6,036 RMB/ton, 8.13% higher than that in early December, and 28.04% higher than that in early October. The average price of soybean oil is 6,656 RMB/ton, 2.46% higher than that in early December, and 12.44% higher than that in early October.

2. Market Analysis

From the beginning of the fourth quarter, there frequently appears good news for grease oil industry. Palm oil and soybean oil are constantly increasing. In December, the oil sector is still at a high level. In the second week, palm oil and soybean oil once again ushered in a red market, with futures market surging and spot market rising.

Future: On December 9, the main P2005 contract of palm oil futures opened at 5,848 yuan and closed at 5,920 yuan, up 120 yuan, with a maximum of 5,980 yuan and a minimum of 5,820 yuan.

On December 9, the main y2005 contract of Lian soybean oil futures opened at 6,378 yuan and closed at 6,378 yuan, up 68 yuan, with a maximum price of 6,448 yuan and a minimum price of 6,320 yuan. Yesterday, it closed at 6,310 yuan and a settlement price of 6,390 yuan.

Spot: On December 9, the mainstream price of palm oil in Zhangjiagang, Jiangsu Province was 6,040 RMB/ton, with a daily increase of 240 RMB/ton. The mainstream price of palm oil in Tianjin was 6,050 RMB/ton, with a daily increase of 270 RMB/ton. The mainstream price of palm oil in Guangzhou was 6,000 RMB/ton, with a daily increase of 200 RMB/ton.

On December 9, the main quotation of soybean oil in Rizhao District, Shandong Province was 6,710 RMB/ton, with a daily increase of 130 RMB/ton; the main quotation of soybean oil in Tianjin district was 6,600 RMB/ton, with a daily increase of 90 RMB/ton. The main quotation of soybean oil in Guangzhou district was 6,680 RMB/ton, with a daily increase of 140 RMB/ton.

This round of palm oil soybean oil rose mainly due to the sharp decline in inventories in the main palm oil producing areas and the low domestic soybean oil inventories. Palm oil storage in Malaysia, the main palm oil producing area, continued to reach a new low in November. And palm oil inventory is expected to decline nearly 6% month on month in November, which is the lowest since July 2018. The soybean oil inventory continued to decline due to the tight supply of imported soybeans, in maintaining plants and decreasing startup rate. At present, the total commercial stock of soybean oil in China is less than 1 million tons, and the weekly to ring ratio has dropped by more than 6%.

3. Market Forecasting

Li Bing, an oil analyst at SunSirs believes that near the New Year's Spring Festival, with the support of rigid oil demand, palm oil and soybean oil are still likely to continue to go crazy in the future. And the price of palm oil and soybean oil may be still in a high swing in the short term.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com

 

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