In 2018, the oil and fat market oscillated to the bottom, and once fell to the low level in 2015. After experiencing high output growth and continuous destocking process, the fat or oil in 2019 is expected to rise.
The bottom support is still at
. From the relative change of oil, the pressure on the soybean oil market is the biggest. The high yield of soybeans for many consecutive seasons has made the raw materials of the presses sufficient, and the soybean oil market lacks the fundamental driving force. Domestically, South American high-yield and imports are expected to continue to be suppressed at least in the first half of the year, which will put relatively heavy pressure on soybean oil. In addition, the pressure of domestic oil and fat stocks is mainly reflected by soybean oil. The degree of de-stocking of soybean oil will affect the overall operation direction of domestic oils and fats.
From the relative relationship of oilseeds, the growth rate of oil demand is significantly slower than the growth rate of soybean meal demand, which has changed significantly toward the growth rate. The oil-to-oil ratio also shows the willingness to repair from the extremely low positional relationship. In particular, the easing of trade friction between China and the United States will improve domestic shortcomings, and the oil-to-oil ratio will also draw a rebound from it. Of course, this process also requires high stocks of soybean oil to ease. In addition, the domestic high-pressure crushing profit will fluctuate with the expected adjustment of domestic soybean supply and the expected impact of demand, and shrinkage or even loss, the crushing rate may be affected, the impact on oil and fat will outweigh the disadvantages, and the loss will be superimposed on low oil-to-oil ratio. Both will limit the excessive sedimentation of the center of gravity of the soybean oil, which supports the bottom of the oil.
Consumption growth point also depends on Southeast Asia
Last year, the major production in the main producing countries caused the global oil and fat accumulation pressure to be concentrated on palm oil. In 2019, palm oil may be gradually affected by the slowdown in production due to the formation of the El Niño climate, which will greatly reduce the further incremental pressure on the global supply of vegetable oil. The impact of El Niño's strength on production expectations will also affect the overall volatility of the oil. The future growth of demand for palm oil still depends on Southeast Asia, especially India. In China, there may be a moderate increase in imports, but it is difficult to increase substantially.
In addition, the increase in the proportion of raw wood blending in palm oil producing countries will increase the demand for palm oil, but whether crude oil can run above $60/barrel for a long time in the future, and also produce biodiesel for vegetable oil. The impact of economy will cause corresponding changes in demand.
Trends in breeds
The EU, China, Canada and other countries have reduced rapeseed production, which leads to insufficient market demand, and the trend of inventory consumption is still tending to decline. The overall supply and demand of oils and fats is the best. Variety. However, after China's rapid decline in inventory (prevented stocks), and the price of vegetable oil relative to other oils and fats, the pace of change in future stock consumption will slow down.
The domestic temporary storage auction basically ended, the inventory basically bottomed out, the superimposed domestic output continued to decline, the imported rapeseed and vegetable oil will still increase significantly, and the bargain can still be over-provisioned. However, the problem with vegetable oil is the price. If it is too big for other oils and is at a price disadvantage, it will still be restricted by soybean oil. Moreover, the difference between the coastal non-transfer crushing and the small press in the Mainland is large, and it cannot be completely replaced. The significant difference in price will continue to exist.
In summary, in 2019, the overall oil and fat situation faced a low rise, from the perspective of supply and demand, vegetable oil, palm oil, soybean oil. However, from the perspective of the recovery space, it is also subject to the supply expectations are still sufficient. If El Niño does not cause a significant reduction in palm oil production expectations, the oil recovery space is more difficult to exceed the 2015/2016 fluctuations. However, there will be better operational opportunities for changes in the price difference between oils and fats. In 2018, the spread of soybean oil palm oil expanded, and the relative strength of 2019 has changed. Consider the allocation of palm oil stronger than soybean oil.
(Author: Founder Medium Futures)