First Capital Futures: External market rally drives overall increase, post-holiday internal market oils and fats rise across the board

On the first day after the holiday, domestic oilseed prices generally rebounded and rose, with the main contract of rapeseed oil up over 2%, leading the oilseed market. During the holiday, international oilseed prices mainly strengthened, with U.S. soybean oil rising over 2% and Malaysian palm oil briefly up nearly 2%. The main drivers were the sharp increase in crude oil prices due to the U.S.-Iran war risk and expectations of the implementation of U.S. biofuel policies. Market rumors circulated that the U.S. RVO policy would be announced this week. Additionally, high-frequency export and production data for Malaysian palm oil in February indicate continued large-scale destocking, suggesting the fundamentals of Malaysian palm oil are still improving. However, during the holiday, the significant narrowing of the Argentine soybean oil premium dragged down international soybean oil spot prices, which also caused a correction after the rebound in Malaysian palm oil.

In terms of rapeseed, ICE continued to rise modestly during the holiday, supporting international rapeseed costs to fluctuate strongly. Domestic rapeseed crushing margins, which were squeezed before the holiday, mostly reflected the negative impact, but post-holiday demand for rebounds remains. Moreover, rapeseed oil spot prices and basis remain firm in the short term, with Jiangsu’s three major rapeseed prices still around 10,000 yuan/ton. Given the short-term inability to quickly improve spot supply, high basis supports the nearby rapeseed oil futures market.

Overall, it is recommended to maintain a bullish outlook on domestic oilseeds after the holiday in the short to medium term, focusing on how crude oil price fluctuations influence international oilseed prices and their impact on the domestic market, especially palm products. The decline in Argentine soybean oil prices has limited the short-term rebound of palm oil futures, so it is not advisable to chase prices excessively; buying on dips is preferred. For rapeseed oil, the firm spot prices support continued short-term rebounds, with future focus on domestic supply recovery pace and changes in spot basis. (First Capital Futures)