Another down day across oil and oilseed commodities has kept spreads between the two relatively stable. A larger-than-expected 1% draw on US crude oil inventories was mitigated by an unexpected build in US gasoline stocks, although US distillate inventory builds were less-than-expected. With US refineries continuing to run at close to full capacity any sign of a sustained downturn in domestic motor fuel demand is likely to spell more woes for already suffering crude oil prices.
Vegetable oil markets continue to fret over finding sufficient demand to mop up a brightening ouptput scenario. USDA tips Indonesia’s palm oil output to hit its 33mn t forecast as plantations continue to mature, which will boost domestic stocks as the country struggles to introduce its ambitious biodiesel mandate plans. Prospects further forward will depend on the ultimate strength of this year’s El Nino, which can have a significant impact on palm oil output if it is particularly pronounced. Palm’s October discount to EU rapeseed oil is nudging towards $250/t, relative to a $25/t RME/PME spot price spread.