Athena Market Buzz

1300 09032023 Athena Market Buzz Thursday 


Good morning,

The POC conference has concluded, and while most speakers were bullish, some have forecasted MDEX to reach RM 5000 as early as Q2 of the coming financial year. Our view, however, differs slightly. We expect Palm to face resistance at RM 4450 for the next three months and become a good short if it falls within the RM 4250-4450 range. On the downside, we maintain that it will become a buy between RM 3550-3750. Until then, the market will remain very volatile and trade within a changing macro factor range.

On the supply side, Indonesian exports are decreasing, but Malaysian exports are not climbing at the same pace. Once Indonesia re-enters the market (somewhere around May), there will be pressure from the sell-side, potentially dragging prices lower. Malaysian stocks falling below the 2 million mark will keep prices supported, but the resistance of RM 4450 should eventually limit consumption, slowing down the pace of export. CNF India indicates that the prices of CPO are between INR 1030-1035, and we have not heard of any major trades.

Bean oil settled marginally higher on CBOT, with March at 58.59 +33 and May at 59.08 +42. The basis improved a lot with the USDA coming out with a smaller than expected crop of Argentina. The basis for MJJ settled on the offer side at -900, pushing the bean oil flat prices about USD 15-20 higher. CNF India indicates that the offers for MJJ are at USD 1185, which is significantly higher than the offer for Sunflower oil at 1170-75. We expect prices to continue to correct, and with the FED tightening interest rates, the BOARD should correct towards 54.50 or even lower, while the basis can also improve from -900 to -400 or even turn neutral.

On a flat price basis in India, we maintain that the price level of USD 1100-1150 will be an excellent long opportunity for MJJ, and a rally could surely take prices higher towards USD 1300. Bean oil will start facing resistance on the upside if prices approach USD 1250 CNF and start finding support when prices correct towards USD 1100. Locally in India, soybean and rapeseed prices are decreasing. Beans are still being marketed at INR 5300, which has the potential to go below the INR 5000 mark, and rapeseed will continue to sell below MSP. India is in a unique spot where imports are cheap now, and edible oil prices have corrected almost 40% from the top, which could result in soybean oil trades below the INR 1000 mark. Eventually, this will create higher meal prices, and crush margins should suffer as well.

We don’t suggest crush plants buy more seeds now at current levels and wait for prices to correct further. On the other hand, one should be a willing seller on Oil and meal. It’s high time India starts future trading in edible soybean oil, at least giving some room for domestic crushers to hedge their longs.

Ukraine is currently facing missile attacks from Russia, and as a result, it is striving to export as much grain as possible before the deadline of the grain corridor on March 18, 2023. We anticipate that the deal will be renewed, and Russian vessels will also be included. However, if an agreement cannot be reached, there will be a significant surge in sunflower oil prices, which may result in sunflower oil being more expensive than bean oil. At present, sunflower oil is being offered in the range of USD 1160-1175, depending on the shipment month, and is being marketed at a discount to bean oil on a CNF India basis. Yesterday, Turkey traded sunflower oil at USD 1105 CIF Mersin, while in India, the same oil traded for spot shipment at USD 1170. Today, the indication for sunflower oil is at USD 1180 for India, with buyers looking to pay just over USD 1150. Six ports in Europe also have CNF India offers with JAS offered at 1150, but no buyers have shown interest yet. Ukraine is expected to plant about 30% less sunflower seeds for the new crop, but it will still produce over 10 million MT, ensuring sufficient supplies. It is advisable for Indians to continue buying sunflower oil, especially now that it is cheaper than soybean oil. We reiterate that the levels between USD 1100-1150 are an excellent buy, and sunflower oil should find resistance at the USD 1300 mark.

  • Argentina SBO
  • Mar-23 -800/-950
  • Apr-23 -800/-1000
  • MJJ-23 -900/-1000
  • Brazil SBO
  • Mar-23 -850/–
  • Apr-23 -850/–
  • May-23 -900/–
  • JJ-23  -900/-1000
  • AS-23 -680/-850
  • OND-23 -600/-850
  • 6 ports Europe AMJ 1145 vs -
  • JAS 1150 vs -
  • OND 1145 vs -
  • Palm oil Midday Market Close 
  • Bmd : May 4164 (-16)
  • H 4194 / L 4140
  • Vol : 16,518
  • Oln:  
  • Apr 985 (pk)
  • Mj 975 vs
  • Jas 952.5 vs 947.5 trd 952.5-950
  • Ond 942.5 vs 935
  • Rbdpo: -10
  • Strn: Mar 960 (deld) 
  • Pfad: Mar 735 (deld)
  • Local Cpo: Mar 4330
  • Laurics
  • Cpko: Mar 250 (pk) / 252 (pg)
  • Rbdpko: Mar 1065
  • Rbdpkoln: Mar 985
  • Rbdpks: Mar 1415
  • Sbo :  
  • May 5878 (+29)
  • Jul 5917 (+17)
  • Aug 5862 (+13)
  • Dce :  
  • May 8012 (-66)
  • Sep 7854 (-80)
  • Black Sea sunflower oil FOB March 1040 vs —
  • Russian sunflower oil FOB March 1040 vs —
  • Spain indicated for April shipment at USD 1160 vs—
  • Italy indicated for April shipment at USD 1155 vs —
  • CIF India indicative offers for April USD 1175 vs 1150 
  • Turkey after trading 1105 CIF Mersin is being offered at USD 1115 vs 1100
  • Currency INR 81.84, RM 4.5190, Rub 75.93 and Euro 1.055



Vivek Pathak 

Athena Tradewinds 

(All views are personal and we do not claim to be 100 % correct. Trade very carefully and at your own risk) 

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