Vegoils commentary: CME soyoil sell-off continues; Malaysia on holiday
Selling-through continued in the soyoil futures market in Chicago on Wednesday April 10, with prices failing to cling to gains seen earlier in the session.
May soyoil contracts on the Chicago Mercantile Exchange (CME) rose as much as 1% during the session, but ended up edging 0.8% lower on the day, trading at $0.4713 per lb at the time of publication.
The market could not sustain the upward momentum and it headed for the third consecutive session of losses, having dropped 3.8% since the beginning of the week.
Downward pressures came from largely unchanged underlying fundamentals and a surge in the value of the US dollar, with US inflation data reported above expectations.
Malaysian palm oil futures trading was halted due to the Eid al-Fitr festivities.
Positioning continued to mark the session on Wednesday ahead of the US Department of Agriculture’s World Agricultural Supply and Demand Estimates (Wasde) report, due to be released on Thursday April 11.
Despite soyoil weakness, soymeal prices also softened during the session while plummeting FOB premiums in Brazil since the beginning of the week continued to weigh on the market despite the slight spike in local cash prices on Wednesday.
In the physical market, South American soyoil premiums continued to rise in Argentina on Wednesday, but held broadly stable in Brazil.
In Argentina, the soyoil basis for May loading was assessed at a $0.064 per lb discount to CME May futures, up 0.2 cents per lb day on day, while in Brazil the same basis was assessed at a $0.0575 per lb discount to underlying futures, unchanged from the previous day.
Brazilian soymeal premiums firmed on Wednesday, with the May basis rising by $3.50 per short ton from Tuesday April 9’s level to a $2.50 per short ton premium to CME May futures.
In Argentina, the May basis was assessed at a $9 per short ton premium to underlying futures, down by $1 per short ton on the day.
Prices for sunflower and rapeseed oil in European ports strengthened on Wednesday compared with the previous day.
Rapeseed oil for shipment in May/June/July was offered €9 per tonne higher than the day before, at €949 ($1,030.50) per tonne FOB Rotterdam, against the buyer’s idea of €936 per tonne FOB Rotterdam.
Rapeseed oil for loading in May/June/July was traded on Wednesday at €940 per tonne FOB Rotterdam and for loading in August/September/October €6 per tonne more expensive than the day before, at €938 per tonne FOB Rotterdam.
Sunflower oil at six European ports increased by an average of $10 per tonne to $1,000 per tonne FOB versus $990 per tonne FOB shipment in the third quarter.
On Wednesday, Fastmarkets heard about sunflower oil trade in six European ports in the range of $980-985 per tonne FOB for shipment in October/November/December.
Activity on the sunflower oil market in the Black Sea region remained muted due to a week of holidays in Turkey.
Sunflower oil for April delivery was offered at $985-987 per tonne CIF India and $980 per tonne CIF India for May delivery against buyers’ idea of $960 per tonne CIF India.
Buyers at the ports showed the idea of purchasing at the level of $820 per tonne CPT Odesa, Pivdennyi.
In the Odesa region, critical logistics infrastructure was again hit by Russian missiles during the night, morning and evening of April 9-10, but there was no official comment on the damage and its potential impact on the agricultural market. At the same time, the national railway operator introduced temporary restrictions on delivery of all cargo in the direction of one of the deep-sea ports.