Vegoils have outpaced gasoil as weather concerns have focused attention on output in southeast Asian palm and US soy. Front month rape oil/palm oil spreads fell back below $300/t overnight, while front month rape oil/soybean oil spreads dropped back to $165/t.
Prospects for Indonesian palm fruit have supported the strongest gains in palm oil after a spell of dry weather, with poor Indian domestic crop prospects boosting the import potential into palm’s largest overseas offtake market.
China remains a concern for palm exporters however as cheap soybean imports continue to steal market share from palm oil given soy’s high protein animal feed credentials. FAS predicts Chinese palm imports will fall in the 2014/2015 marketing year by nearly 5% to 5.3mn t despite still strong demand forecasts for overall Chinese oilseed imports through the end of the 2015/2016 marketing year. The US soy crop condition meanwhile continues to stagnate well below year-ago levels.
MS – 09/09/2015