Yesterday, the domestic futures market showed mixed trends, with oils and fats leading the gains, while ferroalloys fell significantly. In terms of specific varieties, as of yesterday afternoon’s closing, soybean oil, rapeseed, soybean meal, and rapeseed meal had increased by nearly 5%, palm oil had increased by more than 4%, soybean oil had increased by more than 3%, and Zhengzhou oil had increased by more than 2%; manganese and silicon fell by more than 2%. 4%, ferrosilicon fell by more than 3%.
OPEC+ fails to reach agreement
OPEC+ failed to reach agreement at the meeting on Thursday due to objections from the United Arab Emirates A final agreement was reached on the summit, and international oil prices fell after rising. As of Thursday’s close, the August contract of WTI crude oil futures closed at US$75.23/barrel, an increase of 2.40%; the September contract of Brent crude oil futures closed at US$75.84/barrel, an increase of 1.63%.
OPEC+ postponed its ministerial meeting to Friday to conduct more discussions on oil production policy, sources said on Thursday. The UAE had previously rejected plans to immediately relax production restrictions and extend the production reduction agreement until the end of 2022.
Sources said that Saudi Arabia and Russia have reached a preliminary agreement on the plan. According to the agreement, OPEC+ production will increase by 400,000 barrels per day per month from August to December. .
In response to the impact of the COVID-19 epidemic on oil demand, OPEC+ agreed last year to cut production by nearly 10 million barrels per day starting in May 2020, and to gradually withdraw from production cuts by the end of April 2022. . The current production reduction is about 5.8 million barrels per day.
Russia and Saudi Arabia had previously proposed extending the production reduction agreement until the end of 2022 to avoid a new round of oversupply in the oil market next year.
However, sources revealed that the UAE rejected the proposal at the meeting and asked OPEC+ to adjust the basis for calculating production cuts. A higher baseline would mean lower actual production cuts.
The OPEC+ Joint Technical Committee said on Tuesday that demand growth this year is still expected to be 6 million barrels per day, but it reminded that “significant uncertainty” exists and that the oil market will be oversupplied in 2022. .
The trend of oils and fats is relatively strong
In the early morning of Thursday, Beijing time, The U.S. soybean planting area data released by UADA was significantly lower than market expectations, and the U.S. soybean inventory was slightly lower than market expectations. The U.S. soybeans rebounded quickly and drove the collective upward trend of domestic oil and fat varieties.
“The tight supply will make the overall supply of oil crops tighter. Rapeseed, the main substitute for soybeans, also saw a sharp rise yesterday.” Founder mid-term oil and fat futures Oil researcher Wang Yibo said in an interview with reporters.
From the perspective of rapeseed fundamentals, Wang Yibo said that in terms of foreign markets, according to data from the Canadian Ministry of Agriculture, Canada’s rapeseed sowing area will increase by 4% in 2021/2022. Reaching 8.71 million hectares, but due to a sharp decline in opening stocks, which offset the expected increase in production, and the ending stocks of rapeseed in 2020/2021 are very tight, with only 700,000 tons, the total supply of rapeseed is expected to tighten to 20.9 million tons tons, a year-on-year decrease of 50,000 tons, and supply is still relatively tight. In terms of domestic market, in terms of supply, due to the loss of imported rapeseed for three consecutive months, it has affected the rapeseed purchasing behavior of oil mills in the later period. Therefore, the amount of rapeseed arriving in Hong Kong in the later period is likely to be lower than market expectations. In terms of demand, aquaculture profits are good this year, and aquaculture will continue to be strong before September, which will provide strong support for rapeseed crushing demand. Under the imbalance of supply and demand, rapeseed futures prices are expected to maintain an upward trend in the third quarter.
In terms of soybean meal, Dai Junmei, a soybean meal and corn analyst at Melya Futures, believes that in the coming period, U.S. soybeans are expected to remain the main factor affecting the trend of soybean meal. From the perspective of U.S. soybeans, in the future, on the basis of tight new crop inventories due to the significantly lower planting area than expected, U.S. soybean prices are expected to be more sensitive to weather, and overall it is easier to rise than to fall. Affected by weather changes in U.S. soybean-producing areas, soybean meal is expected to rise easily but not fall. It is recommended that holders of early long orders continue to hold on.
“On the domestic front, judging from the situation of domestic soybean arrivals in Hong Kong, my country’s soybean supply in the next two months will be dominated by Brazilian soybeans. It is expected that the arrival volume will be large, which can meet the crushing demand. . In terms of crushing, the soybean crushing volume is expected to increase slightly, but it is difficult to return to the previous ultra-high level of 2 million tons/week. At the same time, my country’s soybean meal is still in the accumulation cycle, and the inventory has risen to a high level in recent years. In terms of demand, my country The demand for live pigs is recovering slowly, freshwater fish breeding is in peak season, and feed demand has not changed much. Therefore, on the whole, it is still recommended to go long on dips in soybean meal.” Dai Junmei said.
“We are relatively optimistic about the soybean meal market in July.” Chen Jiezheng, a researcher at Galaxy Futures, believes that although domestic soybean meal inventories are currently high and oil plants are under greater pressure to withdraw, this round of new production reports It will undoubtedly inject a shot in the arm into the market. With domestic crushing profits falling into deep losses as a whole, the pressure on soybean arrivals in the third quarter will be significantly relieved. In addition, with the unknown production in North America, the international soybean discount is unlikely to fall sharply, and the oil-to-meal ratio is at a historically high level. This will lead to a significant increase in the difficulty of domestic ship buying, supporting the steady rise of domestic spot stocks.
In terms of rapeseed meal, Chen Jiezheng said that the current price difference between soybean meal and rapeseed meal has widened, coupled with the peak season of aquatic products, the demand for rapeseed meal will obviously show the characteristics of the seasonal peak season, and in the future In the future, the pressure on rapeseed and mixed meal arrivals will be eased. Against this background, the overall outlook for the soybean and domestic meal markets is still optimistic.
Oil and oil varieties also recorded large gains yesterday. �Jia Boxin, senior manager of the Grain Futures Research Institute, said that from the perspective of the fundamentals of oil and fat itself, the supply and demand situation of palm oil in the production area tends to be looser. Although the Malaysian epidemic is still affecting the labor force, judging from various high-frequency production data, Malaysia The seasonal recovery of palm oil production has become a fact, and supply-side pressure is gradually increasing. The month-on-month increase in production in June is likely to be more than 10%. At the same time, the demand side also shows the characteristics of gradual recovery, and exports in June are more likely to increase month-on-month. Overall, Malaysian palm oil inventories are likely to increase slightly month-on-month in June, and the turning point has basically been seen.
“The supply and demand pattern of domestic oils and fats has not changed significantly in the near future. The increase in soybean oil inventories continues, the soybean crushing volume is relatively high, the basis is under pressure, and the soybean oil and The trend of palm oil has diverged. In terms of palm oil, due to the inversion of import profits, the arrival volume is not obvious. In the case of high consumption, the inventory is still tight, and the trend is relatively strong. In terms of rapeseed oil, the consumption is relatively light and the inventory is slightly There is an increase.” Jia Boxin said.
Looking ahead to the market outlook, Jia Boxin believes that the speculation on soybean planting area in the United States has basically come to an end. After entering the critical growth period, the weather in the United States will become the most critical factor affecting the oil and fat market. Judging from the current weather forecast, there is less precipitation in the Midwest of the United States. If problems arise later, price fluctuations will increase. However, the pattern of tight domestic oil and fat fundamentals still exists, prices will fluctuate with the external market, and the trend is expected to be dominated by strong oscillations.
Ferro alloys fell sharply
In terms of manganese and silicon, Yide Futures Ferroalloy Senior analyst Han Jie told reporters that yesterday, the manganese silicon 2109 contract increased its positions and increased its volume, and the market volatility began to increase after six consecutive positive rebounds.
The reason, Han Jie said, is that on the one hand, the factory considers its own costs and production profit expectations. In the 7600-7700 yuan/ton range of the 2109 contract, some factories have expressed willingness to sell guarantee operations in batches. On the other hand, the recent announcement of production reduction policies by steel mills in various downstream regions has also intensified the silicon manganese market’s concerns about the expected weakening of downstream terminal demand in the future. “We have observed that during the downward process of the delivery warehouse falling to 7,176 yuan/ton in the early stage, the downstream terminal started the futures price point mode for purchasing, and the inventory shifted from accumulation to depletion. Recently, the 2109 contract fell below 7,400 yuan/ton, and the price fell below 7,400 yuan/ton. Price selling has become active again,” Han Jie said.
“In the near future, the market will still pay attention to the price of Hegang Steel in July and the destocking situation in the later period. It is expected that as prices continue to oscillate downward in the later period of the market, social inventory pressure will gradually ease. In the later period, The spot market will return to industry fundamentals pricing,” Han Jie said.
Looking forward to the trend of ferroalloys in the second half of the year, Ran Yumeng, an analyst at Shenwan Futures, said that from the supply side, consumption control policies may continue to suppress the release of ferroalloy production capacity in the second half of the year. In the first half of this year, my country’s crude steel production increased significantly year-on-year. In the second half of the year, in order to ensure the year-on-year decline in crude steel production this year, downstream production restrictions may be implemented, and downstream demand for ferroalloys may shrink. From the demand side, overseas demand for manganese silicon has picked up significantly this year, and terminal demand has also continued to improve. Magnesium ingot production has increased year-on-year, which may provide support for ferrosilicon prices.
“The current ferroalloy market has seen a small supply gap. In the future, under the combined effect of upstream and downstream production restriction policies, the market pattern of tight supply is expected to continue, thus forming support for prices. And Thanks to the support of the export market and the magnesium metal market, as well as the more obvious suppression effect of consumption control policies on the supply side, the performance of ferrosilicon in the second half of the year is still expected to be stronger than that of manganese silicon.” Ran Yumeng said. </p
