Crude palm oil (CPO) futures in Malaysia edged upward on Monday May 20, tracking strength in the wider vegoil complex.
The most active three-month CPO futures contract for August delivery inched up by 0.7% to 3,918 ringgit ($835) per tonne, opening the session higher as it tracked a firmer Friday close in rival soybean oil futures on the Chicago Mercantile Exchange (CME).
Further support came from Chinese vegoils during Asian trading hours, with the most active palm oil contract on the Dalian Commodity Exchange closing 1.5% higher at 7,664 yuan ($1,061) per tonne, while the equivalent soybean oil contract also went up by 1.5% to 7,986 yuan per tonne.
The most active rapeseed oil contract on the Zhengzhou Commodity Exchange was also up by 0.5% to 8,814 yuan per tonne.
Chinese commodity markets continued to see gains after the government’s announcement of various stimuli to boost its crisis-hit property sector on Friday May 17.
In the cash market, one olein cargo was traded to China at $892.50 per tonne CFR for July shipment, with offers for June cargoes at $905 per tonne, July at $900 CFR per tonne and August-September at $905 per tonne.
CPO on a CFR west coast India basis traded at $942.50-945.00 per tonne for June, while last discussions were at $940.00-947.50 per tonne CFR west coast India for June.
CPO on a CFR east coast India basis was offered around $5 per tonne lower compared with west coast India.
Discussions for CPO out of Indonesia for June were hovering around $900-910 per tonne FOB Indonesia, while olein was offered at $870 per tonne FOB for July.
Weaker export demand capped further gains in palm oil prices, with cargo surveyor Societe Generale de Surveillance (SGS) estimating Malaysian palm oil exports from May 1-20 at 647,353.05 tonnes, down by 13.2% from its April 1-20 estimates.
Meanwhile, ITS placed exports 8.27% lower from its April estimates at 830,608 tonnes, while Amspec reported volumes 9.58% lower at 814,031 tonnes.
In the Americas, soyoil futures posed the fourth consecutive session of gains on Monday, trading at the highest levels in over a month.
The July soyoil contract on the CME jumped 2.5% above Friday’s close level to 46.41 cents per lb at the time of publication.
This was the highest level for the contract since April 15 and the highest for a front-month contract since April 12.
The market borrowed strength from higher vegoils prices in Asia and from an ongoing correction in the oil share — the share of soybean crush proceeds linked to the soyoil output.
Soymeal futures were also up on Monday despite downward pressures from product-spreading dynamics with underlying support from rising corn and surging wheat prices.
The July CME soymeal contract was trading at $473.50 per short ton at the time of publication, up by 1.3% from Friday’s close.
Some delay in the pace of US soybean planting works could have contributed to the rally across the soybean complex.
US soybean export inspections missed market expectations in the week to Thursday May 16 reaching 184,128 tonnes, the USDA showed on Monday.
In the physical market, soyoil premiums for July loading lost steam in Brazil but firmed in Argentina.
The Brazilian July soyoil basis was assessed at a discount of 5.50 cents per lb to CME July futures, down by 0.45 cents per lb compared with the previous assessment.
In Argentina, the same basis rose by 0.25 cents per lb from Friday to a discount of 4.75 cents per lb to July futures.
Soymeal premiums for July loading fell in Brazil but rose in Argentina.
The Brazilian July soymeal premium fell by $1.50 per short ton from the previous assessment and was assessed at $7 per short ton over July futures.
The same premium in Argentina was assessed at a premium of $11.50 per short ton over July futures, up by $4 per short ton compared with Friday.
The European market for rapeseed and sunflower oils was inactive on Monday due to the White Day holiday.
Sunflower oil for delivery in July, August and September was offered at $1,010 per tonne FOB against the buyer’s idea of $995 per tonne FOB.
At the same time, rapeseed oil prices have strengthened by at least €13 per tonne since Friday to €1,000 ($1,087) per tonne while bids dropped €5 per tonne to €960 per tonne FOB Rotterdam for June-July delivery.
The sunflower oil market in the Black Sea region remained subdued due to too large a spread between bids and offers.
Offer levels were heard at $955 per tonne CIF Mersin, Russian origin, for June delivery, against buyers’ ideas of $900-910 per tonne CIF Mersin.
At the same time, there were talks in the market about an offer of sunflower oil at $930 per tonne of CIF Mersin in the first half of the day, which was not heard in the second half of the day.
In other news, Ukrainian sunflower crushing in April is estimated at 1.5-1.63 million tonnes, while May crushing is expected to be close to record levels and amount to 1.4-1.7 million tonnes, according to market sources.