Soybean oil supply continues to tighten, and inventories are being depleted

Yesterday, the CBOT soybean oil market rebounded but failed and then fell sharply, influenced by the possibility that the Middle East situation may improve. Yesterday, the Malaysia palm oil market ended a four-session winning streak with volatile trading and closed lower; new developments in the Middle East situation outweighed Indonesia’s progress on its biodiesel program, and buying sentiment in the market was hit. In China’s domestic oilseeds and oils futures market, prices initially rose and then fell back, with a sharp drop at the close. Market sentiment switched quickly, and differences at high levels triggered intense volatility in the trading screen. After the U.S. released signals that the Middle East situation could improve, crude oil came under pressure and pulled back, leading to profit-taking selling and position reduction. Oilseeds and oils prices lacked upward momentum, and the sector followed crude oil’s sharp pullback. The Middle East situation is complex and evolving; whether Indonesia’s B50 plan can be implemented as scheduled depends to a large extent on the direction of the Middle East situation and the performance of the crude oil market. Domestic oil mills are entering a period of concentrated maintenance. Some oil mills in Northeast China also shut down due to a shortage of soybeans, and in addition, soybean arrivals from Brazil did not meet expectations. As a result, soybean oil supply has continued to tighten and inventories have been drawn down. Near the end of the Qingming holiday stock-up period, end-market demand was flat, and the futures’ pullback from high levels suppressed any rise in oilseeds and oils spot prices. It is expected that oilseeds and oils prices will trade in a volatile, sideways pattern in the near term. (Feed Industry Information Network)