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Analysis of China's Vegetable Oil Market in 2013
Release time:
2013-01-10
Although the oil market is brewing a warm winter market, in the medium and long term, the center of gravity of vegetable oil futures prices at home and abroad will still move down in 2013, supplemented by the characteristics of high before and low after, decline in oil-meal ratio and revaluation of soybean-palm price difference. Soybeans into the down cycle After the 2012 "roller coaster" market, CBOT soybean futures may usher in a new round of down cycle. With the increasingly clear supply and demand environment of soybean in the United States in 2012/13, the fermentation trend of tight supply has disappeared. Instead, the expectation of high soybean yield in South America is rising, which will help to alleviate the pressure of tight global oil supply
Although the oil market is brewing a warm winter market, in the medium and long term, the center of gravity of vegetable oil futures prices at home and abroad will still move down in 2013, supplemented by the characteristics of high before and low after, decline in oil-meal ratio and revaluation of soybean-palm price difference.
Soybean Enters Down Cycle
After experiencing the "roller coaster" market in 2012, CBOT soybean futures may usher in a new round of down cycle. With the increasingly clear supply and demand environment of soybean in the United States in 2012/13, the fermentation trend of tight supply has disappeared. Instead, the expectation of high yield of soybean in South America is rising, which will help to ease the pressure of tight global oil supply. This, coupled with the expected increase in U.S. soybean acreage in 2013, may add to the downward momentum of futures forward contracts.
Our simple linear regression analysis model shows that the production of U.S. beans in 2013/14 is expected to increase by 9.1 compared to the current year. Under the premise of relatively stable domestic crushing and export demand, the ending inventory of U.S. beans has risen significantly, which will cause greater downward pressure on the price of oil and grease.
If you combine the technical chart analysis of CBOT soybean futures since 1995, you can see that the time period for the U.S. soybean futures to rise or fall is basically about two years, and each round of bull market stage and bear market stage will always appear in pairs. History has come out of two symmetrical figures in succession. We judge that the end point of a new round of decline since September 2012 may be July and August 2014.
Consumption slowdown is hard to avoid
In 2012, the two rounds of high oil futures prices were mainly transmitted by the inflationary pressure of upstream raw materials, and were passively completed under the background of high inventory. The increase in supply and inventory pressure in 2013 will still be a true portrayal of the oil market. Statistics show that, as domestic oil consumption will enter a 3%-4% growth rate downturn, the situation of supply exceeding demand may have an amplification effect, resulting in both current prices under pressure, but the performance of varieties will be significantly different: soybean oil slightly moderate, palm oil weak constant weak, vegetable oil stagflation resistance.
On the soybean oil side, in the context of domestic stockpiling of raw material stocks and increasing strategic reserves, oil plants maintaining a normal start-up speed will push up commercial inventory expansion. Although there will be a short-term boom in consumer ports around the Spring Festival in 2013, it cannot hide the prospect of a medium-and long-term decline. In terms of palm oil, the road to de-stocking is far away and the process is bumpy. It is expected that Malaysia's inventory of more than 2 million tons will become the norm. Domestic ports are in a downturn, and the loose supply and demand environment is difficult to change. As for vegetable oil, the gap between supply and demand of domestic rapeseed may be further expanded, and the temporary storage price of rapeseed may be increased by 10% to about 5500 yuan/ton, thus pushing the theoretical production cost of rapeseed oil to more than 12000 yuan/ton, making rapeseed oil futures expected to perform the trend of "outstanding" in May and June 2013.
Industrial demand hard to see bright spots
As a new engine power for oil consumption, industrial demand may encounter a "late spring cold" in 2013, suggesting that the expansion cycle of oil biodiesel energy attributes is at risk of ending. On the one hand, the global economy will still adjust, the United States is facing the challenge of public domain failure and increasingly serious fiscal tightening, the European crisis has not really escaped from the danger, China's economic power is still insufficient, consumption enthusiasm has not been ignited, and the oil industry consumption growth environment is lacking; on the other hand, The turning point of biodiesel manufacturers' production profits has not come, and the concept of oil energy attributes will be greatly reduced.
It is worth mentioning that, with the crude oil market into a relatively flat period, driving its sharp rise and fall of the trigger factors appear to be relatively scarce, resulting in oil and oil futures prices and crude oil correlation showed signs of weakening, this new feature will make oil prices in the energy factors continue to weaken. Given that the current CBOT soybean oil remains at a high level of $400-450/tonne compared to WTI crude oil, well off the historical average of $312/tonne, suggesting that soybean oil futures have been relatively overvalued.
Bean brown spreads face revaluation
As Malaysian palm oil enters the winter and spring production reduction channel, and BMD crude palm oil is about 120 USD/ton lower than ICE diesel oil. There is upward momentum, and it is guided and returned by historical seasonal laws. At present, the oil and fat plate is showing signs of winter offensive driven by palm oil as the "leader", which makes the price difference of soybean palm oil converge rapidly. It is expected that this momentum will run through the first quarter of next year.
However, the price difference between soybean and palm oil has entered a revaluation cycle since 2012. The average price difference for the whole year is close to 1500 yuan/ton. It is expected that the bottom center of gravity of the price difference between domestic soybean and palm oil index will move up to about 1200 yuan/ton in 2013, while the price difference between CNF (CIF) in the international market will hardly return to below 200 US dollars/ton, and high operation will become the market norm. As far as the oil-meal ratio is concerned, although there is an upward repair intention in the first quarter of next year, due to the different downstream consumption performance of the two, the growth rate is different, resulting in the "meal strong oil weak" structure is expected to continue.
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Liaoning Jiashi Nutritional Plant Oil Development Co., Ltd.
Tel:024-89722880
E-mail:lnjiashi@lnjiashi.com
Address: No.32, Daoyi 4th Street, Shenbei New District, Shenyang City
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