Vegoils commentary: CPO soars further on firm vegoils, energy markets

Crude palm oil (CPO) futures surged to the highest level in over a year as bullish sentiment persisted with firmer rival oils and energy values extending support. 
The most active third-month CPO futures contract for May delivery on Bursa Malaysia rose 2.29% to 4,291 ringgit ($916) per tonne – the highest close seen since March 3 2023 – with the contract trading in the range of 4316-4190 and nearby March and April contracts both closing above the 4,300 level.  
CPO futures remain well-supported amid another day of firmer values in the wider vegoil complex, as it tracked overnight gains in rival soybean oil futures on CME and as crude oil edged higher during Asian trading hours. 
The Chinese vegoil complex also closed stronger, with the most active palm oil contract China’s Dalian Commodity Exchange surging by 3.54% to 8,132 yuan ($1,131) per tonne, while the equivalent soybean oil contract moved 1.28% higher to 7,770 yuan ($1,080) per tonne.
The most active rapeseed oil contract on the Zhengzhou Commodity Exchange moved up 1.17% to 8,213 yuan ($1,142) per tonne. 
Preliminary estimates for Malaysia’s palm oil exports for the period March 1-15 were pegged at 605,605 tonnes according to cargo surveyor Intertek Testing Services (ITS) or 7.83% higher on the month, with finalized estimates expected out Friday. 
The increase, if confirmed, will continue to lend support to prices, with demand seen improving amid the tighter supply environment. 
Meanwhile, in the physical market, Indian buying was active for the fourth straight day, with trades heard done for CPO at $1,055 per tonne CNF west coast India for March shipment and $1,030-1,045 per tonne CNF east coast India for April shipment.
Physical cargo offers were also tracking the rise in CPO futures, with levels moving on average around $30 per tonne higher from the previous day. 
Chinese buyers on the other hand were heard to have washed out one olein cargo for May shipment at $975 per tonne CNF, with trade activity muted. 
In the Americas, soyoil futures declined Thursday after hitting monthly highs earlier in the session with the loss of momentum driven by reduced South American oil premiums and profit-taking.
The May CME soyoil contract was broadly unchanged on the day at the time of publication at 48.52 cents per lb.
Despite a sharp rally in palm oil and surging crude prices, soyoil futures failed to cling to gains obtained earlier in the session and corrected lower later in the day pressured by profit-taking after three consecutive sessions of steep upswings.
South American soyoil premiums decreased significantly since the beginning of the week, hampering the arbitrage opportunities that had opened up for US exports in the previous weeks, which contributed to cap gains.
May CME soymeal contracts edged slightly higher on the day, trading at $336 per short ton at the time of publication.
Soymeal futures traded unchanged to higher during the session despite falling grain prices and the bullish atmosphere that prevailed at vegetable oils markets during the day as investors assessed what a tighter palm oil global supply and demand balance could mean.
In the physical market, the Argentine soyoil basis for April loading was assessed at a 7.5 cents per lb discount to May futures.
Yesterday, after Fastmarkets assessment time, 2,000 tonnes of Argentine soyoil for April loading traded at a 7.70 cents per lb discount to May futures, after 2,000 tons traded at a 7.5 cents per lb discount earlier in the day.
The April soyoil basis in Brazil dropped 0.35 cents per pound on the day, assessed at a 6.65 cents per lb discount to the same futures contract.
Argentine soymeal premiums for April loading rose $2.5 per short ton compared with Wednesday, assessed at a $12.5 per short ton premium to May futures.
The April basis in Brazil was assessed at a $7.5 per short ton premium to underlying futures, down $1.5 per short ton on the day.
Sunflower oil in six European ports traded at $955 per tonne FOB for April/May/June loading, which is identical to yesterday’s level, while supply levels and buyer ideas for the same period strengthened by $10 per tonne on the day to $965 per tonne versus $945 per tonne FOB.
Rapeseed oil for May/June/July shipment was offered at €904 per tonne FOB Rotterdam, while buyer’s ideas were shown at €901 per tonne FOB Rotterdam, in line with Thursday’s trading level.
Sunflower oil of Black Sea origin increased in price by an average of $10 per tonne, while sellers were restrained.
CIF Mersin Turkey offer levels were heard at $895 per tonne for April delivery while buyers hid.
For supplies to India, sunflower oil was offered at $980 per tonne CIF for delivery in April-May, while trades were heard at $975 per tonne CIF and $980 per tonne CIF for delivery in April.
The range of purchase prices for spot volumes of sunflower oil in the ports was quite wide: $775 per tonne CPT Danube ports and $780-800 per tonne CPT POC, while the maximum levels of $790-800 per tonne CPT Pivdennyi were isolated since buyers were interested in short-term purchases period.