Key takeaways:

Veg oils prices rise in China as futures gain, driven by festive demand and positioning.

Indian palm oil exports surge 29.52% in early September, but buying interest remains subdued.

CME soyoil dips over 1% amid falling crude prices and rising US stockpiles.

Veg oils price trends and global market activity

Crude palm oil (CPO) futures trading was absent on Friday September 5 with the Bursa Malaysia Derivatives Exchange closed for a Malaysian national holiday. Indonesian and Indian market activity was also limited amid public holidays.

Chinese veg oil futures were higher on Friday, led by gains in palm olein on the Dalian Commodity Exchange with the most active January futures contract gaining 1.6% to close at 9,526 yuan ($1,334) per tonne. The equivalent soybean oil contract gained 1.22% to close at 8,450 yuan per tonne, tracking movement in palm olein.

The January rapeseed oil futures contract on the Zhengzhou Commodity Exchange also gained 1.08% to close at 9,818 yuan per tonne.

Chinese futures drive veg oils price higher

The upward movement of Chinese veg oil futures on Friday contrasted with Monday September 1, when the BMD was also closed for a holiday and the most active contracts moved in a narrow range and in mixed directions.

Traders were engaging in pre-weekend positioning with local demand expected to firm ahead of festive holidays in China, even though stocks of palm oil, soybean oil and rapeseed oil remained relatively high.

According to data from the China National Grain and Oils Information Centre (CNGOIC), combined inventories of the three oils rose in the week to August 29 to 2.51 million tonnes, with weekly gains registered across soybean oil, rapeseed oil and palm oil.

Veg oils price outlook in Indian markets

Malaysia’s exports of palm oil for the first 5 days of September were estimated at 290,085 tonnes, according to data from cargo surveyor Intertek Testing Services (ITS). The figure represents a 29.52% increase from the same period in August.

Meanwhile in the cash market, activity was limited amid ongoing holidays. Offers for September-shipment CPO to India were around $1,162.50-1,167.50 per tonne CFR west coast India (WCI), with some buying ideas around $1,157.50 per tonne CFR WCI. Offers for October-shipment were around $1,175-1,185 per tonne CFR WCI.

Buying interest for palm oil from India remained overall subdued, with inventories at reasonable levels and import margins staying unfavorable.

Between 6,000 and 9,000 tonnes of soyoil were reported traded on a CFR WCI basis at $1,060 per tonne.

Crude oil and its impact on veg oils price

Soybean oil futures on the Chicago Mercantile Exchange extended lower in the Americas on Friday, tracking losses in global crude oil markets.

At 1pm US Eastern Time, the most heavily traded December CME soyoil contract was down by more than 1% on the session to 51.38 cents per lb

Crude oil prices continued lower following an unexpected increase in US crude oil stockpiles and ahead of the OPEC+ meeting this weekend. It is expected that the organization will decide to hike production targets.

CME soybean meal futures were trading marginally higher in early afternoon trading on Friday amid ongoing product spreading with soybean oil and gains in corn prices. Still, prospects for a large US harvest kept a lid on the soybean and meal markets.

The most liquid December soybean meal futures contract was up by 0.42% to $284.90 per short ton at 1pm US Eastern time.

South American soyoil and soymeal premiums

In the physical market, South American soyoil premiums varied narrowly on Friday.

In Argentina, soyoil for delivery in November and December changed hands at a discount of 2 cents per lb under December CME futures, with between 1 million and 2 million tonnes traded for each month. Earlier in the day, unconfirmed reports of batches for the same delivery period were heard traded at a discount of 1.70 cents per lb under December futures. But this information could not be confirmed by the time of publication.

Premiums for those positions started the day higher, compensating for the drop in CME futures, but lost steam during the day to end virtually unchanged day on day. The October basis was assessed at a discount of 1.40 cents per lb under October futures.

In Brazil, soyoil premiums were unchanged to slightly lower across the curve, with the October basis down 0.20 cents per lb from the previous trading day at a premium of 0.10 cents per lb over October futures.

Soymeal premiums remained broadly unchanged in Brazil, with the October basis assessed at a discount of $5 per short ton under October CME futures.

In Argentina, premiums found support and rose by $1.50-2.50 per ton across the curve, with the October basis assessed at a discount of $8.50 per ton to October futures.

European rapeoil, sunoil and soyoil prices

In Europe, rapeoil FOB DM Rotterdam prices edged €1.50 per tonne higher day on day, with volumes for October loading offered at €1,065 per tonne and bids disclosed at €1,040 per tonne. For the November-December-January period, offers were heard at €1,048 per tonne with bids at €1,035 per tonne.

Sunoil prices at six European ports edged $3 per tonne higher day on day, assessed at $1,275.50 per tonne for October loading.

Meanwhile, soyoil FCA Hamburg prices held steady, with October assessed at $1,095 per tonne.

Black Sea activity and veg oils price trends

The Black Sea sunflower oil market showed more activity on the offer side on Friday, but trading interest from buyers stayed muted.

Ukraine-origin oil was heard at $1,290 per tonne CIF Mersin for September, $1,285 per tonne for October, and $1,275 per tonne for November. Russia-origin sunflower oil was reported offered at $1,265 per tonne CIF Izmir for October.

A trade was also heard on Thursday September 4 in the range of $1,270-1,275 per tonne TDD Mersin for first-half October.

Despite the increase in selling interest, buyers were largely absent, with most said to have already covered their needs. Market participants noted that demand could re-emerge following sales linked to the industry exhibition.

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