Vegoils commentary: CPO rebounds to five-week high, soyoil drops marginally

Crude palm oil (CPO) futures rebounded on Thursday to reach the highest level in nearly five weeks, tracking strength in related vegoils with underlying support coming from a firm cash market. 
The third-month CPO futures contract for May delivery on Bursa Malaysia rose 1.59% to MYR3,969/mt ($836/mt), ending the last trading day for February in positive territory. 
Chinese vegoils continued to rise for the third straight day, with the most active palm oil contract on the Dalian Commodity Exchange rising 1.08% to CNY7,478/mt while the equivalent soybean oil contract moved 0.66% higher to CNY7,358/mt.
The most active rapeseed oil contract on the Zhengzhou Commodity Exchange also rose similarly by 0.44% to CNY7,833/mt.
Lower exports volume for February had a limited impact on palm oil prices on Thursday,  with cargo surveyors Intertek Testing Services (ITS), Amspec Agri Malaysia and SGS pegging exports for full-February at 14.03%, 18.48% and 14.58% lower on the month to 1.106 million mt, 1 million mt and 996,845 mt respectively. 
Production estimates expected in coming days from analysts and associations , coupled with the key palm oil industry conference in Kuala Lumpur next week will help to guide trade direction. 
Meanwhile, as reported earlier, the Indonesian trade ministry confirmed the CPO reference price for March 1-31 at $798.90/mt with the official notice issued Thursday, with the lower reference price keeping export taxes effectively unchanged for March. 
In the physical market, olein was traded to north China at $905/mt CNF for March shipment, while CPO was traded to India at $955/mt CNF west coast India, also for March with offers rising to $960/mt CNF for the same month and $945/mt CNF for April. 
Indian buyers have been more active this week in picking up palm oil cargoes, despite it carrying a premium against rival oils on account of improved margins and local prices, coupled with lower stocks following reduced buying in January and February. 
In the Americas, soyoil and soymeal futures movements were limited Thursday with soyoil continuing to edge lower and meal rising mildly for the second consecutive session.
The session was marked by a continuation of the reversal between soymeal and soyoil prices.
The May CME soyoil contract fell 0.3% on the day to 45.05 c/lb at the time of publication.
Soyoil futures continued to give away part of the gains seen earlier in the week amid overall bearish sentiment and a lack of strong changes in underlying fundamentals.
Soyoil losses were capped by higher Malaysian palm oil futures.
May CME soymeal contracts rose 0.5% on the day, trading at $329.2/st at the time of publication, the second consecutive upswing.
Soymeal continued to benefit from a reversal in product spreading and from bargain-buying.
Strong weekly export sales also contributed to support prices.
US soybean meal and cake net export sales landed close to the upper end of market expectations in the week to February 22 with 456,200 mt of new sales reported, the US Department of Agriculture (USDA) showed Thursday.
Weekly volumes surpassed the 202,000 mt from last week, were up 54% from the previous four-week average and came in close to the higher end of analysts’ expectations set 550,000 mt.
In the physical market, the soyoil basis for April delivery in Argentina rose 0.79 c/lb on Thursday, assessed at a 6.71 c/lb discount to May CME futures.
Brazilian premiums for the same delivery month moved 0.55 c/lb higher on the day, to a 6.75 c/lb discount over underlying futures.
The soymeal basis for April delivery in Brazil gained $1.5/st compared with Wednesday, assessed at a $13.5/st premium over May futures.
In Argentina, the same premium was seen $3.5/st higher, at $6/st over the same futures contracts.
Sunflower oil liquidity at six European ports remained minimal on Thursday, with supply levels at $915/mt FOB versus buyers’ idea of $900/mt FOB for April/May/June loading.
Rapeseed oil sellers in European ports increased offer prices by €5mt compared to the previous day to €890/mt, while buyer levels remained unchanged and were heard at €855/mt FOB Rotterdam, for loading in February/March/April.
Sunflower oil in the Black Sea region started with supply levels of $850/mt CIF Mersin for delivery in March, while buyers were hiding.
During the day, cheaper offers of $840-845/mt CIF Mersin for delivery in March were also heard, against the buyers’ idea of $832/mt CIF, while by the end of the day, sunflower oil for delivery in March was trading at $833/mt CIF Iskenderun.
Prices for sunflower crushers have stabilized and, depending on the region and quality indicators, were heard in the range of UAH13,800-14,500/mt ($359-377/mt) CPT crush plant, including VAT.
Trade on non-pelleted meal was heard throughout the day at $225/mt CIF Marmara for March shipment, right after yesterday’s trade which took place at $226/mt CIF Marmara.