Vegoils commentary: US soyoil near 2020 highs, sunoil jumps again
US soyoil futures jumped another 2.5% on Wednesday on surging US soybean futures, rallying WTI crude oil futures and a weaker dollar, while the Ukrainian sunoil market extended its seven-year high.
After cooling in Tuesday's session, the October soyoil contract rallied 70 points during Wednesday's session to trade at 34.77 ct/lb by 1300 Eastern time - levels not seen since early January this year.
US soybean futures were up nearly 16 c/bu by time of press at $10.07/bu - its highest since early June 2018 - on firm Chinese demand and fund buying which in turn further supported soyoil futures.
On top of that, additional support came from crude oil futures, which rallied for a second straight day on an unexpected slide in US inventories, according to IEA's Tuesday report, as well as production shutting down as Hurricane Sally headed for the US Gulf.
Brent crude was up 3.9% to just under $42/bbl by time of press while WTI was 4.3% higher at just over $40/bbl.
While the Bursa Malaysia was off for the day, the Chinese Dalian soybean oil contract was up 0.4% and palm oil futures ended 0.8% higher.
The Argentine cash soyoil market tried to catch up with the recent rally in global sunoil prices, with basis premiums jumping another 20-30 points along the curve.
November cargoes were valued at 3.00 ct/lb over December futures equivalent to $833.75/mt FOB Up River - nearing a four-year high.
Basis premiums for Brazilian soyoil firmed by a similar amount after October traded at 4.90 ct/lb over October futures on Tuesday evening and November-December changed hands at 4.90 ct/lb over December futures.
Sunoil prices continued to surge Wednesday supported by a wave of short covering the rally in US soyoil futures.
October loading traded twice at $1,020/mt FOB and then at $1,025/mt FOB, with both trades done in the port of Chornomorsk, while the January-February-March strip changed hands at $1,000/mt FOB Mykolaiv.
The market also rumoured September loading to have traded at $1,040/mt and $1,045/mt FOB Ukraine, but those trades could not be confirmed by time of press.
Thus, the APM-16, now reflecting November loading, was assessed at $1,020/mt FOB Chornomorsk, based on a $5/mt inverse between October and November.
The European market followed suit, with the October-November-December laycan trading at $1,080/mt and then at $1,090/mt FOB Sixports.
In India, offers for Ukrainian sunoil were heard at $1,080/mt CIF for October shipment with no trades heard by time of press, though Indian demand was present in the market, trade sources told Agricensus.
"Sunflower oil is short in India, and even though we have seen over $100/mt jump [in prices] in the last 10 days, we see willing buyers and locally most of the traders are not even offering any prices for ready cargo," Vivek Pathak, a broker based in Mumbai, said in a note to clients.
And Dutch rapeseed oil prices for October loading crossed the €800/mt FOB DM level for the first time since late July as Paris rapeseed futures jumped 1.4% to €393/mt on the back of the rally in soybean futures.
Yet liquidity remained thin as Europe's vegoil market remained focussed on sunoil, a Dutch broker said, adding that "sun is the leader."