Zhengxin Futures: As Crude Oil Market Rally Slows, Vegetable Oil Bullish Momentum Weakens

Domestic spot soybean oil transactions remain decent; foreign traders have paused quoting, and the market is cautious. Palm oil trading is light with no new vessel purchases. Soybean oil inventory stands at 910,000 tons, palm oil inventory has increased to 810,000 tons, and rapeseed oil inventory is 260,000 tons. Brazilian soybeans continue to be harvested and listed, with higher export volumes in January-February. Market expectations remain bullish ahead of the final biofuel policy announcement, but overnight crude oil prices fluctuated significantly. CBOT soybean oil opened high and then declined, with the overall price center still moving upward. As the bio-diesel industry profits improve, Indonesia may resume B50 implementation around mid-year. In February, palm kernel and palm oil production and exports both declined, with institutional forecasts suggesting end-of-month inventories around 2.63 million tons. Recently, India canceled soybean and sunflower oil orders over 100,000 tons and shifted to palm oil purchases. Overall, external disturbances continue to dominate, but supply and demand in Southeast Asia are improving, causing the BMD gross palm oil price to rise sharply. Geopolitical conflicts have caused diesel prices to surge, and palm oil has rarely traded at a discount to diesel. The improved cost-effectiveness of biodiesel has further boosted market sentiment, with all three major oils surpassing pre-year highs and reaching new seasonal peaks. However, as crude oil prices slow their rise, the momentum for further gains in oils weakens. Keep an eye on today’s MPOB report.