[In the first half of the year, the center of gravity of domestic soybean oil price moved down, and it may pick up in the second half of the year]
In the first half of the year, the domestic soybean oil price center of gravity moved down year-on-year, and the overall low level was consolidated. The double increase of domestic supply and demand and the limited increase of supply restrict the price decline, and macro and related oils and fats support the soybean oil market. In the second half of the year, the demand is expected to grow steadily, the supply increment is still limited, and the external bullish atmosphere is superimposed. It is expected that the soybean oil market is expected to rebound.
[The domestic soybean oil price trend in the first half of the year is in line with the annual report expectation]
In the first half of the year, the overall focus of domestic soybean oil market moved down year-on-year, showing a shock consolidation situation, which was basically consistent with the forecast in the Annual Report of China Soybean Oil Market in 2023-2024. Due to the fact that the supply-side increment was less than expected during the year, the supply-demand pattern was not completely loose, and the decline during the period was less than expected. As of June 26th, the national average price of primary soybean oil was 7865 yuan/ton, down 3.71% from the end of 2023.
[The downward shift of cost and price center of gravity is an important factor for the low consolidation of soybean oil prices]
The import cost of soybean decreased, and the bottom support of soybean oil was weak. The import cost price of soybeans is dominated by CBOT soybean futures price. In the first half of 2024, CBOT soybean futures price drove the cost of soybeans to Hong Kong to fall first and then rise, and the center of gravity moved down year-on-year. As of the 26th, the average soybean import cost in the first half of the year was 4,150 yuan/ton, down 9.49% year-on-year.
[The increase of domestic soybean oil market supply is less than expected, which restricts the space for spot decline]
In the first half of the year, the increase of domestic soybean oil market supply was limited, and the supply and demand pattern was not completely loose, which restricted the decline of soybean oil price. According to customs data, from January to May, 2024, China imported 37,369,900 tons of soybeans, a year-on-year decrease of 5.42%. In the first half of the year, soybean oil production was about 7.97 million tons, up 2.84% year-on-year; On the demand side, the consumption of soybean oil in the first half of the year was about 8.1 million tons, up 6.16% year-on-year.
[Macro and related vegetable oil market bottomed out, soybean oil followed the fluctuation]
Domestic soybean oil prices will be disturbed by macro and related oil prices. In the first half of the year, crude oil futures prices led the domestic and foreign vegetable oil markets in the first quarter, and palm oil prices showed an obvious upward trend in the first quarter. At the beginning of the second quarter, oil futures prices at home and abroad stagnated and fell back. Around May, the extreme weather in rapeseed and soybean producing areas disturbed, and the rising price of oilseeds led to the rebound of soybean oil and rapeseed oil.
[In the second half of the year, the internal and external bullish resonance, soybean oil market or the overall strength]
From the cost point of view, the probability of La Nina phenomenon from July to September is 65%, which may cause the market to worry about crop yield and benefit the CBOT soybean futures price. On the domestic supply and demand side, the soybean oil supply side is expected to increase in the second half of the year, but the increase is limited. In the second half of the year, the demand for oil and fat will increase seasonally. It is expected that the consumption of soybean oil will increase steadily, and the difference between supply and demand will shrink first and then expand, and the corresponding price will rise first and then fluctuate.
[Macro and related oil markets provide positive guidance for soybean oil market in the second half of the year]
The Fed’s interest rate cut is expected to remain, and the US dollar index may fall, leading to the bullish crude oil and related oils and fats market. It is expected that the spot price of palm oil will move up in the second half of the year, which will bring some support to the soybean oil market; In terms of rapeseed oil, the price is expected to continue to strengthen in the second half of the year.
[To sum up, the domestic soybean oil market may continue to improve in the second half of the year]
In the first half of the year, the loose pattern of supply and demand was not obvious, and at the same time, macro and related oils bottomed out, and the domestic soybean oil market was consolidating at a low level. In the second half of the year, the increase in soybean oil demand is expected to exceed the increase in supply. At the same time, taking into account the macro-profit atmosphere and the support of related vegetable oils, the soybean oil market may rise together. It is expected that the domestic soybean oil market will continue to improve in the second half of the year, and the fluctuation range of the average price of first-class soybean oil is 7800-8800 yuan/ton, which is stronger than that in the first half of the year.
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