report summary
fat futures price is greatly affected by the overall trend of commodity . crude oil price has a strong guiding role on oil prices. In the situation where the overall commodity market does not decline, it is also difficult for oil prices to change. The medium and short-term low inventory and positive basis still have strong support for oil and fat futures prices.
The impact of La Nina weather on South American soybean yield in the first quarter of 2022 is worth paying attention to. In January and February, palm oil is still in the production cut season, my country's oil and fat inventory is still at a low level, and oil and fat prices are still not prone to fall sharply. The second quarter is the off-season for oil and fat consumption, and palm oil has begun to transition to the increase in production season, and oil and fat prices are under pressure to fall seasonally. The oil and fat market is in the peak season for procurement and consumption in the third and fourth quarters. US soybean cultivation and weather are the focus of future market attention, and there is a high possibility that oil and fat prices will fluctuate significantly.
is expected to show a wide fluctuation in 2022, and the overall upward trend of oil and fat market is relatively weak. The market trend depends on factors such as palm oil production recovery, oil and fat inventory changes, soybean weather and macro. It is recommended that oil and fat futures mainly participate in light positions and short-term positions.
oil and fat variety hedge against . In terms of oil meal in 2022, the strength of oil meal mainly depends on the weather conditions in the soybean production areas. The probability of the price difference between rapeseed oil and soybean oil remains high. It is difficult for the soybean-palm price difference to remain at a very low level for a long time. The price difference between soybean-palm is expected to widen. It is recommended to buy soybean oil to sell palm oil arbitrage and participate on lows.
report text
2021 oil market review
2021 oil market prices showed an upward trend overall, palm oil production was lower than expected, palm oil led the oil market trend, and soybean oil price was relatively weak. The spot price of Zhangjiagang first-grade soybean oil rose from 8,960 yuan to 9,450 yuan, up 490 yuan, up 5.5%; the spot price of 24-degree palm oil in Guangzhou rose from 7,540 yuan to 9,340 yuan, up 1,800 yuan, up 24%; the fourth-grade rapeseed oil in Nantong, Jiangsu rose from 10,500 yuan to 12,950 yuan, up 2,450 yuan, up 23%.
overall oil and fat showed a wide fluctuation trend in the first half of the year. Soybean oil inventory in the US market was tight, Malay palm oil production recovered slowly, China's oil and fat inventory was low, the oil and fat basis was high, and the oil and fat price fluctuated sharply and closed slightly higher. The oil and fat market rose sharply in the third quarter, with crude oil prices rising and palm oil production recovering lower than expected, soybean oil spot price rose to 11,000 yuan/ton, and palm oil spot price once rose to 10,000 yuan/ton mark. In the fourth quarter, the pressure of high-quality soybean production and listing, the expectation of recovery of oil and fat supply, and the decline in the oil and fat basis, and the oil and fat prices began to fall and adjust.
Regarding the trend of the oil and fat market in 2022, the author believes that the supply and demand relationship of oil and fat will return to normal in 2022, palm oil production will gradually recover, the bull market in the oil and fat market will end, and the probability of a wide fluctuation in the market is relatively high. Whether the market can fall sharply depends on the changes in the overall market.
Global oil market supply is slightly tight
According to the US Department of Agriculture's supply and demand data in December, the global vegetable oil production in 2021/2022 is estimated to be 214.9 million tons, an increase of 8.52 million tons, an increase of 4.13%. The global vegetable oil production in the new year increased significantly, and the global vegetable oil production growth rate was greater than the average annual growth rate of more than 3% in previous years. As soybean oil production increases, palm oil will recover, but the reduction in rapeseed oil production has slowed down the recovery of oil supply.
2021/2022 global vegetable oil consumption was 211.5 million tons, with consumption increasing by 5.41 million tons, and consumption increasing by 2.63%. Biodiesel consumption is difficult to adjust below. The global vegetable oil inventory in 2021/2022 was 23.98 million tons, a decrease of 810,000 tons from the previous year, a decrease of 3.27%; inventory consumption ratio was 11%; the global vegetable oil supply in 2021/2022 is recovering, but due to the large decline in carry-over inventory in the previous year, vegetable oil inventory continued to decline this year, and the oil supply has not yet reached a serious loose pattern.
2021/2022 global soybean production is expected to increase overall, with a bumper harvest of soybeans in the United States, soybean planting area in South America rising, and there are still variables in the soybean weather in South America. Under relatively normal weather conditions, soybean production will also increase.La Nina weather will continue until February 2022. South American soybean weather remains the focus of market attention. The weather in South American soybean production areas in the first quarter of 2022 is particularly critical, and extreme weather will also raise the price of oil and fat.
Global rapeseed oil production continues to be stable, with the output remaining at a level of around 27 million tons, and the supply pressure is much smaller than palm oil and soybean oil. The global rapeseed oil production in 2021/2022 was 27.48 million tons, a decrease of 1.71 million tons from the previous year, a decrease of 5.8%; the global rapeseed oil end-of-period inventory was 2.51 million tons, a decrease of 810,000 tons, a decrease of 24%. Statistics Canada said that the production of rapeseed in 2021/22 was 12.78 million tons, a decrease of 34.4% compared with the previous year. Global rapeseed oil inventory continues to decline, and the inventory is very tight. Among the three major oils and fats, rapeseed oil is the most tight variety.
2021/2022 global palm oil production was 76.54 million tons, with a recovery increase of 5%, Indonesian increased by 1 million tons, and Malay increased by 1.85 million tons. Due to the impact of operational investment and the impact of the epidemic on labor introduction and mobility, the production data in Malay and Indonesia have been recovering slowly, and oil prices have received great support in 2021. Looking ahead to the second half of 2022, the probability of global palm oil production and inventory rebound is very high. In terms of monthly palm oil data, data released by the Malaysian Palm Oil Bureau (MPOB) shows that the total palm oil production in Malaysian in November was 1.63 million tons, and the inventory at the end of November was 1.81 million tons. The recovery of palm oil production has been lower than expected, and palm oil inventory is still at a low level. Palm oil prices still have strong support in the first quarter of 2022. Rainfall in La Niña is conducive to the increase in palm oil production in Southeast Asia. Palm oil has entered a period of recovery and growth in the second quarter of 2022, and palm oil prices are under adjustment pressure.
China's oil and fat market will replenish inventory
According to official forecast data, China expects to import 7.2 million tons of palm oil in 2021/2022, an increase of 380,000 tons; domestic soybean oil production is 17.56 million tons, an increase of about 890,000 tons; rapeseed oil production is 6.16 million tons, and inventory has dropped to 1.1 million tons. According to the supply and demand balance data, China's oil supply and demand are relatively balanced, and the supply of rapeseed oil is relatively tight.
According to China Grain and Oil Business Network data, as of mid-December, the inventory of edible palm oil ports in key domestic areas was 540,000 tons, with poor import profits and insufficient ship purchases, and palm oil inventory at a low level; soybean oil inventory was 990,000 tons, lower than the same period in previous years. The low inventory of soybean oil and high basis brought strong support to futures prices. The vegetable oil stocks are 360,000 tons, and the inventory is at an extremely low level, and the supply of vegetable oil is also tight. China's soybean oil, palm oil and rapeseed oil stocks are all low, and China's oil and fat need to replenish its inventory in 2022.
In the past two years, the pattern of low inventory and high basis of the oil and fat market has been supporting the strengthening of the oil and fat market and the trend of low inventory in the first half of 2022 is still difficult to change significantly. The pattern of high basis of the oil and fat is expected to continue. The price of oil and fat is still facing the problem of futures return. In the state of replenishing inventory, the positive basis of oil and fat still has a strong support for the oil and fat futures price.
2022 Oil and Fat Market Outlook
2021/2022 Global oil and fat production increased, consumption increased, inventory declined, supply neutrality was slightly tight, and oil and fat were still in the stage of restoring inventory. As time goes by, the supply and demand relationship gradually develops towards balance and looseness. The oil and fat market faces the turning point of supply and demand in the second and third quarters of 2022. When the inventories of Malay and Indonesian palm oil will recover, prices will be under pressure.
This article is from Guangfa Huangpu Hui
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