Equity markets have been quite volatile, with Japan leading the fluctuations. After significant losses, the market rebounded yesterday and partially today. However, MDEX performed as anticipated, dropping below the RM 3750 mark. Traders might misinterpret this and suggest short positions or exiting longs. Previously, we recommended entering long positions between RM 3550-3650 and exiting between RM 3950-4000. Now, we suggest initiating longs between RM 3650-3750 and exiting around RM 4000. Currently, October contracts are trading at RM 3695-10, near the day’s low. Given the global tensions and unstable business environment, commodities may become a new hard currency. Shorting at RM 4250 and above seems safe for now, but we will reassess as conditions evolve.
Palm Oil CASH Market:
CNF India traded several times yesterday for ROL between USD 940-92.50, and today sellers are around USD 940, but buyers are hesitant. Sentiments are down, and with rival oils like soybean oil trading in India around USD 950, palm oil buyers are reluctant to go long. Winter months will likely shift food and fuel demand towards soft oils, particularly soybean oil, pushing palm prices lower. Despite this, we still recommend making longs between RM 3550-3650 and exiting closer to RM 4000.
CBOT and SOYBEAN OIL:
CBOT bean oil settled lower last night, with September trading at 40.85 (-24) and October at 40.26 (-27). Supports at 40.00 are crucial; if the market stays below this level for two sessions, it could quickly drop to 37.50. Currently, it is at 39.66 (-30). Basis has improved to even, and further corrections could turn it positive. Small trades of 30-40,000 mt of bean oil occurred last night for OND between USD 955-965, with sellers asking USD 964 today and buyers bidding at USD 960. We reiterate that USD 950 is an attractive level for longs in bean oil, especially for OND, as it will be used in food and biofuel. The RSI is below 40%, which may seem bearish, but it’s a good opportunity for commercials to go long. Prices could rebound to USD 1000, aligning with sunflower oil offers. An anticipated US interest rate cut could boost market sentiments. We strongly advise against panicking and making shorts, as the market can quickly rise 200-300 points, leading to heavy margin calls. It’s best to maintain long positions in CBOT and flat price basis. In India, local degum for OND is trading at INR 82,500, aligning with USD prices.
Sunflower Oil Market:
Ukraine is expecting an early but smaller harvest of around 12 million MT, with reduced oil content due to excessive heat. Rapeseed and cotton crops in India are also expected to be lower. This reduction in high oil content crops might balance the excess in beans over time. Sunflower oil should continue to trade at a premium to bean oil until at least December. Ukrainian farmers are reluctant to sell seeds at lower prices, so we don’t anticipate cheap offers for OND. Six European ports for OND hold at USD 1030, while Indian buyers hope to secure small volumes around USD 980, but no firm sellers are yet available. Russian sunflower oil might trade around USD 1000, a USD 40 premium over bean oil. Demand from the Middle East and India remains muted due to cheaper soybean oil, keeping the premium below USD 60 PMT until the new crop is fully harvested. Egypt has a tender today and is expected to book soybean oil instead of sunflower oil.
*Arg SBO*
Aug -/-50, *tdd -20*
Sept -10/-60, *tdd -30*
OND -20/-50, *tdd-20*
*Br SBO*
Aug +130/-80
Sept +200/even
Oct +50/-70
OND- /-50
6 ports Europe *SFO Athena, FOB ($)*
OND 1030 vs 1020
JFM 1030 vs 1020
Palm Midday Market Close
Bmd : Oct 3724 (+19)
H 3749 / L 3687
Vol : 43,369
Oln
Sept 895 vs
Ond 867.5 vs 862.5
Jfm 870 vs 865
Amj 865 vs
Rbdpo: -5
Strn: Sep 915 (deld)
Pfad: Sep 825 (deld)
Local Cpo: Aug 3920
Laurics:
Cpko Aug 320 (pk) / 320 (pg)
Rbdpko: Aug 1340
Rbdpkoln: Aug 1240
Rbdpks : Sep 1560
Sbo :
Aug 4087 (-unch)
Sep 4077 (-8)
Oct 4018 (-8)
Dce :
Sep 7576 (-122)
Jan 7428 (-114)
Rm 4.5
Crude : 73.41
Black Sea sunflower oil Indicative Sept FOB 930 vs 900 , OND sellers at USD 940 at the moment
Russian sunflower oil FOB 925 vs 890
Spain indicated for May/ June at USD 1020 vs 980
Italy indicated for May/June at USD 1015 vss 960
CIF Lw India indicated now for July/Aug 1000 vs 980 , Sept 1010 vs —
Turkey indicative ideas Mersin Sept USD 990 vs ncb
Currency INR 83.93 RM 4.48, Rub 85.53 and Euro 1.0924
