CITIC Futures: Oil and Fat Reduce Positions and Decline

In the fats and oils futures market, as the Chinese New Year approaches, spot trading remains light, funds are exiting to avoid risks, and prices are consolidating weakly. From an industry perspective, soybeans: the U.S. Department of Agriculture’s February report raised Brazil’s soybean production estimate by 2 million tons, and global soybean stocks were increased by 1.1 million tons. On the demand side, attention is on China’s willingness to purchase U.S. soybeans, India’s potential soybean oil imports, and updates on U.S. biodiesel and fermentation space. Without additional bullish news, U.S. soybean oil prices may face significant resistance to move higher. Domestic soybean supply is relatively sufficient; before the Chinese New Year, soybean oil plants are expected to gradually reduce operations, potentially leading to a supply and demand weakness. Future focus should be on the decline in inventories. Palm oil: Although the MPOB report showed January stocks below market expectations of 2.9 million tons, weak export performance from January 1-10 pressured sentiment, causing Malaysian palm oil prices to continue falling, with domestic prices struggling to rebound and adjusting weakly. Rapeseed oil: Since China and Canada reached an agreement to reduce tariffs in early January, Chinese importers have gradually increased Canadian rapeseed purchases. Today, market expectations for Canadian rapeseed imports have risen, and future market supply growth appears clearer. Continued attention should be paid to the clarification of China-Canada rapeseed trade policies. Additionally, Australian rapeseed arriving at ports has entered the crushing stage, and rapeseed oil supply is expected to gradually recover. Future focus should include Russian rapeseed oil imports and domestic rapeseed oil basis price trends. (CITIC Futures)