Week 2: Overview of the world veg-oil market
Market weekly analysis Agri
- In Argentina, the Ministry of Agriculture reduced its soybean production forecasts for 2017 by 2.8 million tons to a total of 56 million tons. The Rosario Grain exchange is more pessimistic and forecasts a total output of 52.5 million tons. This is due to dry weather conditions which led Argentinian farmers to turn to maize and wheat instead.
- India continues its soybean crushing and imported more than 80 KT of Argentinian soybean this week.
- For 2016/2017 season, USDA corrected its world soybean production forecasts down by 0.15 million tons to 337.85 million tons, which is still a record-high value. Month-on-month American production is estimated to be down by around 1.5 million tons and Brazil up by 2 million tons on rising planted area.
- The forecasted palm oil output recovery in Indonesia and Malaysia is stabilizing the oilseed complex. The Malaysian Palm Oil Board announced an increased production this year. The output could be at the level of 2015 again after a 10-months drop. For 2016-2017, CPO production is expected to rebound by 5 million tons.
- It is expected, though, that the production growth will be visible only in the second half of the year while the stocks should still remain high due to high expected demand.
- In the last days China’s purchases have sustained CPO prices as the country is building stocks before the Chinese New Year holidays. Last session, CPO CIF Rotterdam increased by around 2% to an average of $794 per MT for Malaysian product.
- Rapeseed importations from Canada or Australia are becoming more and more interesting for European buyers with current high local rapeseed prices.
- After their rally over €420 per MT at the beginning of the year, rapeseed prices began falling and are traded around €414-415 per MT for February deliveries on Euronext market.
- As a consequence, for the last month, rapeseed oil prices are steady at the level of $910-915 per MT on average in Rotterdam.