Analysis of China's Vegetable Oil Market in 2013
Although the oil and fat market is brewing a warm winter market, in the medium and long term, the focus of domestic and international vegetable oil futures prices will still move downwards in 2013, supplemented by the previous high and low, the ratio of oil stagnation and the revaluation of the soybean brown price difference.
Soybeans enter the down cycle
After experiencing the “roller coaster” in 2012, CBOT soybean futures may usher in a new round of decline. With the increasingly clear supply and demand environment for soybeans in the United States in 2012/13, the supply of tight fermentation has disappeared. Instead, South America's high-yield soybeans are expected to rise, which will help alleviate the tight pressure on global oil supplies. In addition, the US soybean acreage is expected to increase in 2013, or it will add momentum to the futures contract.
Our simple linear regression analysis model shows that the US soybean production in 2013/14 is expected to recover 9.1% from the current year. Under the premise of relatively stable domestic and export demand indicators, the US soybean ending stocks will rise significantly, which will result in Downward pressure on the price of grease and oil.
If we combine the technical chart analysis of CBOT soybean futures since 1995, we can see that the time period of the rise or fall of the US soybean futures price is basically about two years, and each round of bull market and bear market will always appear in pairs. History has continuously emerged from two symmetrical figures. We judge that the new round of decline since September 2012 may be in July and August 2014.
Consumption slowing is difficult to avoid
In 2012, the two-round high price of oil futures price was mainly transmitted by the upstream raw material inflation pressure, and was passively completed in the context of high inventory. In 2013, the increase in supply and the increase in inventory pressure will still be a true portrayal of the oil market. Statistics show that as domestic oil consumption will enter a period of 3%-4% growth, the supply-over-demand situation may have a magnifying effect, resulting in both prices being pressured, but the performance of the varieties will be significantly different: soybean oil is slightly moderate The weak palm oil is weak, and the vegetable oil is stagflation and resistance.
In the case of soybean oil, in the context of domestic stockpiles of raw materials and increased strategic reserves, the maintenance of normal engine start-up speed will push up the expansion of commercial inventories. Although there will be short-term prosperity of the consumer port around the Spring Festival in 2013, it cannot hide the prospect of the medium and long-term trend; in palm oil, the road to destocking is far away and the process is also rough. It is estimated that Malaysia’s inventory will be higher than 2 million tons. It will become the norm, the domestic port is in a downturn, and the supply and demand environment is difficult to change. The price bottoming tour between the internal and external markets has not yet ended. In terms of vegetable oil, the domestic rapeseed supply and demand gap may be further expanded, and the price of rapeseed may increase by 10 % to 5,500 yuan / ton, thus pushing the theoretical production cost of vegetable oil to 12,000 yuan / ton or more, making the vegetable oil futures expected to perform in the May and June 2013 "outstanding" trend.
Industrial demand is difficult to see
As a new engine power for oil consumption, industrial demand may encounter “cold spring” in 2013, suggesting that the expansion cycle of oil biodiesel energy properties faces an end risk. On the one hand, the global economy will still be adjusted. The United States faces the challenges of public sector failure and fiscal austerity. The European crisis has not really escaped from danger. China’s economic momentum is still insufficient, consumer enthusiasm has not been ignited, and the oil industry’s consumption growth environment is lacking. On the one hand, biodiesel manufacturers have not yet made a profit turning point, and the concept of oil and energy properties will be greatly reduced.
It is worth mentioning that as the crude oil market enters a relatively flat period, the triggering factors that drive its sharp rise and fall are more scarce, leading to a weakening of the correlation between oil futures prices and crude oil. This new feature will make energy factors in oil prices. Continue to weaken. Given that current CBOT soybean oil remains at a high level of $400-450/ton compared to WTI crude oil, it is far from the historical average of $312/ton, suggesting that soybean oil futures prices are already relatively overvalued.
Bean brown price difference faces revaluation
As Malaysian palm oil enters the winter and spring production cut-off channel, and the low premium level of BMD crude palm oil is about US$120/ton lower than ICE diesel, there is a revival of kinetic energy, and it is guided by historical seasonality and regression. Palm oil showed signs of a winter offensive under the “leading”, which caused the price difference of soybean palm oil to converge rapidly. It is expected that this momentum will run through the first quarter of next year.
However, since 2012, the price difference of soybean palm oil has entered a revaluation cycle. The average price difference is close to 1,500 yuan/ton. It is expected that the bottom of the domestic soybean palm oil index spread will be moved up to 1,200 yuan/ton in 2013. The international market CNF (CIF) spread is difficult to return to below $200/ton, and high-end operation will become the market normal. As far as the oil-to-oil ratio is concerned, although there is an upward willingness to repair in the first quarter of next year, the structure of the “small oily weak” is expected to continue due to the difference in downstream consumption performance and the difference in growth pace.
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