Athena Market Buzz

1600 04072024 ATHENAMARKETBUZZ THURSDAY



Palm Oil Market :

The CNF India price for CPO has reached USD 1000 PMT for spot months, with forward prices not far behind at USD 980 on the offer side. Technical levels for palm oil have seen a break above USD 4000, maintaining the rally above RM 4000 but not yet enough to push it over RM 4250 immediately. Indians find it difficult to pay USD 1000 at the moment, but with the recent rally in soybean oil—where August shipment degum is trading over USD 1020—we may see this happen soon.

RSI on palm oil is over the 50% mark, and bullish sentiments will likely keep prices supported above RM 4000. However, a rally beyond RM 4250 towards RM 4450 is expected to face strong resistance from commercial players and will likely result in selling. We suggest our traders be prepared to sell the market once prices cross RM 4250 and cover shorts when prices trade between RM 3750-4000. For absolute longs, wait for prices to trade below RM 3750-3650, although it may be challenging to remain at such low levels given the current macro environment and stronger rival oils. A breakout above RM 4450 will only be possible with significant crop damage to sunflower seeds in Ukraine or soybean seeds in India and the US.

In the long term, we are confident that the RM 3500 level will remain protected. As crude oil prices move towards USD 150 on Brent by 2026/27, we expect stronger raw material prices and higher levels on MDEX. Today, CPO to India was offered around USD 995 for July and August at USD 985, with buyers willing to pay no more than USD 975. Recently, India traded ROL at USD 940, which is now offered around USD 965 with limited buying interest.

Bean Oil Market:

Bean oil on CBOT settled at 48.66 +1.60 for August, safely higher than our target price of 47.50. Funds have started buying CBOT, and we expect it to rally towards 52.50, where one can start shorting bean oil on CBOT. Longs can consider exiting their positions between 49-50.00 and be prepared to make longs when prices correct below 47.50. Although basis levels have corrected, the overall flat price has improved. A rally in CBOT has motivated traders to make longs in India, with trades for forward months showing positive margins. For August, trades for India were heard at USD 1020, and INR prices for the same month were INR 86,500 + duty, at par with USD offers. At USD 1020, bean oil CNF India is still cheaper compared to sunflower oil and CPO, which is approaching USD 1000.

Firmer rapeseed oil prices in India, a good monsoon, and strong rural and urban demand should keep vegetable oil prices well supported. We reiterate that traders missing the opportunity to buy spot duty-paid cargo in India, still available at a discount to replacement, will soon regret it. The Indian market may soon discuss a duty hike until the budget is presented, which could cap CBOT prices, providing an opportunity to cover. Locally, degum for ready shipment in India is quoted at INR 88,500, July shipment at INR 87,300, and August at INR 87,000 + duty, with buyers close by.

Sunflower Oil Market:

Sunflower oil is maintaining its strength. Higher imports in India are increasing domestic stocks at the expense of cheaper oils like palm and soybean oil. Disparity in sunflower oil will persist, and traders will soon be interested in owning new crop cargoes. Ukraine is not offering cheaper OND prices at the moment, with the best offers around USD 1045. However, Turkey is trading new crop at a good inverse to spot prices, making other destinations less interested in owning forwards at par with spot prices. Russia is expected to increase its planting area over last year, while Ukraine's area is expected to decrease. Weather issues may severely impact yields, resulting in a smaller sunflower seed crop next year compared to the current campaign.

We reiterate that prices between USD 950-1000 will become the new benchmark for new crop sunflower oil. If it trades within this range, one should not hesitate to make longs. Note that during the current campaign, we have seen prices as low as USD 850 CNF India, which seems unlikely for the new crop campaign, at least for the calendar year 2024. In Europe, six ports traded OND sunflower oil between USD 1040-1045 yesterday, with sellers maintaining the same level today. In Turkey, nearby offers continue around USD 1010, with buyers still looking for sub-1000 levels.

 


  • Argentina SBO
  • JA -370Q/-500Q
  • Aug -580/-620, tdd -640
  • Sept -630/-700
  • OND -600/-720
  • Brazil SBO
  • July ?/-400Q
  • Aug -550/-650
  • Sept -450/?
  • OND -550/-700
  • 6 ports Europe Argentina SBO
  • JA -370Q/-500Q
  • Aug -580/-620, tdd -640
  • Sept -630/-700
  • OND -600/-720
  • Brazil SBO
  • July ?/-400Q
  • Aug -550/-650
  • Sept -450/?
  • OND -550/-700
  • Palm oil Market Close 
  • Bmd : Sep 4067 (-15)
  • H 4122 / L 4052
  • Vol : 63,312
  • Oln  
  • Aug 912.5 vs 
  • Sept 907.5 vs   
  • Ond 897.5 vs 890
  • Jfm 900 vs 895
  • Amj 902.5 vs 895
  • Rbdpo: -5
  • Strn: Aug 920 (deld) 
  • Pfad: Aug 847.5 (deld)
  • Local Cpo: Jul 4150
  • Laurics: Jul 333 (pk) / 333 (pg)
  • Rbdpko: Jul 1285
  • Rbdpkoln: Jul 1205
  • Rbdpks : Jul 1460 (pk) 
  • Sbo :   closed
  • Dce :  
  • Sep 8000 (+4)
  • Jan 7908 (+14)
  • Rm 4.707
  • Crude : 83.32
  • Black Sea sunflower oil Indicative  FOB 940 vs 900
  • Russian sunflower oil FOB 935 vs 890
  • Spain indicated for May/ June at USD 1050 vs —
  • Italy indicated for May/June at USD 1045 vs ncb
  • CIF Lw India indicated  now  for  July 1065 vs 1035 , Aug 1070 vs 1035 
  • Turkey indicative ideas Mersin USD 1010 vs 990 
  • Currency INR 83.45, RM 4.70, Rub 88.33 and Euro 1.08


Thanks and regards


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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