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Upswing keeps vegoils/gasoil spreads steady

A slight upswing in both vegoil and gasoil prices on Tuesday has kept intergrade September spreads broadly steady this morning, with BOGO pricing in the mid-$180s/t. US soybean traders on Tuesday eyed stronger Chinese stock data as a positive demand signal, while crude oil traders are anticipating a draw in this afternoon’s DOE data set. US distillate stocks however are expected to report a build. Spot palm oil prices have remained under pressure on Wednesday as the palm oil trade anticipates a build in domestic stocks when Malaysia reports its official July figures next week. Further forward Asian palm oil traders are keeping a close eye on El Nino prospects, which have contributed to the futures curve turning a shallow 2015 inverse into a carry over the past week. Australia’s Bureau of Meteorology yesterday reported the 2015 El Nino well-established and continuing to strengthen, predicting Pacific Ocean warming likely to be the highest seen this century but below the highs of 1982 and 1987. El Nino events typically create hot, dry weather patterns over southeast Asia which can impact palm oil plantations.

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