Global Supply, Demand and Price Outlook for …...Global Supply, Demand and Price Outlook for...
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Global Supply, Demand and Price Outlook
for Oilseeds, Oils and Meals
Presentation at the Australian Grains Industry Conference on 2 Aug 2017 in Melbourne
Thomas Mielke, ISTA Mielke, Oil World,Global Market Research on Oilseeds, Oils and Meals
Please feel free to contact me for assistance at <[email protected]>
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§ ISTA Mielke GmbH – publisher of OIL WORLD - was founded in 1958 § ISTA = International STatistical Agricultural Information§ Leading private authority for global research and market analyses for
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Monthly Prices from Jan 1973 until 20 July 2017 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16
0200400600800
1000120014001600
Palm oil crudeRape oil
cif Rotterdam in US-$ / MTMonthly Prices of 2 Oils
Palm oil is thePrice Leader for Oils and Fats Worldwide
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The Global Market
The Overall Target is the Satisfaction of Demand (mainly for food; biodiesel may have to be curbed)
The major drivers for production are to be seenin the demand and in prices.
Prices have to be sufficiently attractive forproducers to invest and expand.
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Price
Governments
Demand
Financial Markets& Funds
Weather
Media
Supply
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Soybeans 62%
Rapeseed 11%
Sunseed 9%
Cottonseed 7%
Groundnuts 5%
Copra & Palmkernels 4%
Other 3 Oilseeds 2%
2017/18 -- 557.3 Mn T
Other ctries 14%
EU-28 6%
C.I.S. 8%
Canada & U.S.A. 27%
Brazil 20%
Argentina 11%China 8%India 6%
10 Oilseeds - - 557.3 Mn T
Global Production of 10 OilseedsGlobal Impacts fromOilseeds
Ample supplies currentlyprimarily of soybeans, and also in 2017/18,
Unless US droughtdamage aggravates
Many Uncertainties and Swing Factors will determine Prices
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91/92 94/95 97/98 00/01 03/04 06/07 09/10 13/14 17/18F100
150
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450
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10 Oilseeds: World Area and Production
Most of the growth in soybeans
In 20 yearsworld soybean outputmore than doubled from158 Mn T in 1996/97 toan estimated 349 Mn T in 2016/17
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10 Oilseeds: World Production (Mn T)
Soybeans
Other 9 oilseeds
In 2016/17 boost in Soybean production: World 349 Mn T (+38)
USA 117 Mn T (+10)
S. America 186 Mn (+21)
Decline aniticipated for2017/18. But it is, ofcourse, still uncertain byhow much?
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World Production (Mn T) and Area (Mn ha)SOYBEANS
Harvested Area
Production
High likelihood that worldproduction of soybeanswill decline in 2017/18.
But even if world outputdeclines by about 5 Mn T to around 343 Mn T nextseason, it would still beenough to cover prospectiveconsumption.
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Soybean Crop TrendMn T
U.S.A.
Argentina, Brazil & Paraguay
Soybeans have lost attractiveness in South America. In Argentinaplanted area may declineto a 6-year low of 18.9 Mn ha in 2017/18.
Reduced productionanticipated in the USA and S.America in 2017/18
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U.S.A. : Soybean Supply & Demand ( Mn T ) S e p t e m b e r / A u g u s t
17/18F 16/17 15/16 14/15 13/14 Op. stocks . . . 11.50* 5.35 5.19 2.50 3.83 Crop. . . . . . . . 113.00* 117.21 106.86 106.88 91.39 Imports . . . . . .70* .67* .66 .93 2.10
Exports . . . . . 56.00* 56.90* 52.92 50.20 44.65 Crushings . . . 52.80* 51.30* 51.33 51.16* 47.38* Other use 3.40* 3.53* 3.10 3.77* 2.77*
End. stocks . . 13.00* 11.50* 5.35 5.19 2.50
Stocks/usage 11.6% 10.3% 5.0% 4.9% 2.6%
U.S.A. : Soybean Supply & Demand ( Mn T ) S e p t e m b e r / A u g u s t
17/18F 16/17 15/16 14/15 13/14 Op. stocks . . . 11.50* 5.35 5.19 2.50 3.83 Crop. . . . . . . . 113.00* 117.21 106.86 106.88 91.39 Imports . . . . . .70* .67* .66 .93 2.10
Exports . . . . . 56.00* 56.90* 52.92 50.20 44.65 Crushings . . . 52.80* 51.30* 51.33 51.16* 47.38* Other use 3.40* 3.53* 3.10 3.77* 2.77*
End. stocks . . 13.00* 11.50* 5.35 5.19 2.50
Stocks/usage 11.6% 10.3% 5.0% 4.9% 2.6%
US soybean production isforecast to decline toaround 113 Mn T (down 4.2 Mn T).
We expect an averageyield of 3.15 T/ha in 2017 (or 46.8 bu/acre), off 10%. On Jly 30 about 59% G/E versus 72% last year.
USDA release on Aug 10.
US exports to decline in Sept/Febr 2017/18, due torecord S. Amer. supplies
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Daily futures from 2 Jan 2017 until 25 July 2017Ja17 Feb Mar Apr May Jun Jly
900
920
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960
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1020
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1060
Nov 201750-day moving average
CBOT: Daily Soybean Futures (c/bu)
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Soybean Trade Flows in 2016
Exports Imports
USA (43%)
Paraguay & Uruguay (6%)
Brazil (38%)
Argentina (7%)
Ukraine (2%)
EU-28 (11%)
China (62%)
Mexico (3%)Other Asia(17%)
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(a) Crushings, food and other use in Aug/July. 01/02 04/05 07/08 10/11 13/14 16/17
0102030405060708090
100CHINA: Soybean Demand and Share of Imports
Mn T
Imports
Total Use (a)
Chinese soybean imports will probably not increase in 2017/18, because
1) Current stocks are record large and 2-3 Mn T above a year ago, and
2) this year’s domestic output is seen at 15.0 Mn T, up 3.2 Mn T
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1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018F0
20
40
60
80
100
120Soybeans: World Stocks as of end-August (Mn T)Ample world soybean
supplies, if our currentcrop estimatesmaterialize.
Record stocks.
But weather uncertainties
One additional swing factor to watch: Farmer sellingFarmers have built larger storage. New market factor
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O c t o b e r / S e p t e m b e r 00/01
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10 Oilseeds : World Crushings (Mn T)
9 other seeds
Soybeans
Further boost in worldsoybean crushings required in 2016/17 andin 2017/18 (up 12-13 Mn T in each year), mainlybecause of1) rising demand2) insufficient supplies ofother seeds, and3) low stocks of veg oils
This is creating a surplusin oilmeals
Argentine and Indian crushings curbed by lack of meal demand
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-20
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10
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7 Oilseeds: World Production
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7 OILSEEDS: World Supply and Demand ( Mn T )
Forecast Change 2017/18F to 16/17 16/17 15/16 14/15
Opening stocks 114.0 +21.5 92.5 97.2 77.5 Production . . . . . . . . 548.2* - 3.3 551.5 501.7 521.7
thereof soybeans 343.1* - 6.4 349.5 311.2 320.0 Sunseed . . . . . . . . 48.1* - 0.9 49.0 42.9 41.3 Rapeseed . . . . . . . 63.4* +0.1 63.3 64.2 67.0 Cottonseed . . . . . . 41.5* +2.3 39.2 37.1 45.3 Groundnuts (b) . . . 30.4* +0.1 30.3 28.0 27.8 Palmkern & Copra 21.7* +1.6 20.1 18.4 20.2
Total supplies . . . . . 662.2* +18.2 644.0 598.9 599.2
Disappearance. . . . . 548.2* +18.2 530.0* 506.4 502.0 thereof soybeans 343.1* +14.3 328.8* 315.6 298.7 Sunseed . . . . . . . . 48.1* - 0.6 48.7* 42.6 41.2 Rapeseed . . . . . . . 63.8* +0.3 63.5* 64.1 68.5
Ending stocks . . . . . 114.0* +/- 0 114.0* 92.5 97.2 thereof soybeans 100.4* +/- 0 100.4* 79.7 84.0
7 OILSEEDS: World Supply and Demand ( Mn T )
Forecast Change 2017/18F to 16/17 16/17 15/16 14/15
Opening stocks 114.0 +21.5 92.5 97.2 77.5 Production . . . . . . . . 548.2* - 3.3 551.5 501.7 521.7
thereof soybeans 343.1* - 6.4 349.5 311.2 320.0 Sunseed . . . . . . . . 48.1* - 0.9 49.0 42.9 41.3 Rapeseed . . . . . . . 63.4* +0.1 63.3 64.2 67.0 Cottonseed . . . . . . 41.5* +2.3 39.2 37.1 45.3 Groundnuts (b) . . . 30.4* +0.1 30.3 28.0 27.8 Palmkern & Copra 21.7* +1.6 20.1 18.4 20.2
Total supplies . . . . . 662.2* +18.2 644.0 598.9 599.2
Disappearance. . . . . 548.2* +18.2 530.0* 506.4 502.0 thereof soybeans 343.1* +14.3 328.8* 315.6 298.7 Sunseed . . . . . . . . 48.1* - 0.6 48.7* 42.6 41.2 Rapeseed . . . . . . . 63.8* +0.3 63.5* 64.1 68.5
Ending stocks . . . . . 114.0* +/- 0 114.0* 92.5 97.2 thereof soybeans 100.4* +/- 0 100.4* 79.7 84.0
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World Production (Mn T) and Area (Mn ha)RAPESEED & CANOLA
Harvested Area
Production
World supplies of rapeseed & canola will remain tight in 2017/18, contrary to earlier expectations of a recovery
Rapeseed production only at 63-64 Mn T in 2017/18
In Europe farmers losing interest in rapeseed.
Biggest losses in -Canada 18.6 Mn (vs 19.25)-Australia at best 3.9 (4.4)-China less than 6.0 Mn T
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A u g u s t / J u l y 01/02 04/05 07/08 10/11 13/14 16/1702468
1012141618202224 Exports Crush
Canada: Canola Disposals (Mn T)CANADA : Supply & Demand of Canola ( Mn T )
A u g u s t / J u l y17/18F 16/17 15/16 14/15 13/14
Op. stocks .95* 2.02 2.54 2.82* .59 Output . . . . . 18.60* 19.25* 18.38 16.41 18.55 Imports . . . . .09* .09* .10 .08 .07 Exports . . . . 9.60* 10.90* 10.30* 9.14 9.18 Crushings . . 8.70* 9.11* 8.32 7.36 6.98 Other use. . . .34* .39* .38* .26* .23*End.stocks. . 1.00* .95* 2.02 2.54 2.82*
.09* .10 .07 10.90* 10.30* 9.18
.95* 2.02 2.82*
CANADA : Supply & Demand of Canola ( Mn T )A u g u s t / J u l y
17/18F 16/17 15/16 14/15 13/14 Op. stocks .95* 2.02 2.54 2.82* .59 Output . . . . . 18.60* 19.25* 18.38 16.41 18.55 Imports . . . . .09* .09* .10 .08 .07 Exports . . . . 9.60* 10.90* 10.30* 9.14 9.18 Crushings . . 8.70* 9.11* 8.32 7.36 6.98 Other use. . . .34* .39* .38* .26* .23*End.stocks. . 1.00* .95* 2.02 2.54 2.82*
.09* .10 .07 10.90* 10.30* 9.18
.95* 2.02 2.82*
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SUNFLOWERSEED
Harvested Area
Production
All-time records in world supplies of sunflowerseed and oil helped to moderate the impact of insufficient supplies of palm oil in Oct/June 2016/17,
In Oct/Sept 2016/17 world exports of sun oil set to be boosted by 1.8 Mn T to a record 10.2 Mn T
Sun oil prices below those of soy oil in past 10 months. This is likely to change in 2017/18
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biofuel food and other
Total Usage in Mn T17 Oils & Fats : World Consumption
Average demandgrowth in past 5 seasons:
Total +6.5 Mn T per year
Biofuel +1.7 Mn T Food/other +4.8 Mn T
Substantial Growth in World Demand of Oils/Fats ! !
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28.4 kg
Per capita consumption of Oils & Fats 2016
64.467.2
43.1
26.5 25.2 24.5
17.5 15.6 15 14
0
10
20
30
40
50
60
70
80(Kg)
Inflated by biofuel usage
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2005 2007 2009 2011 2013 2015 20170
5
10
15
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25
30
35
40World Production of Biodiesel (Mn T)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170
2
4
6
8
10
12Biodiesel Use of Major Feedstock (Mn T)
Palm oil
Soya oilRape oil
Used oil
Tallow
Others
Outlook Biodiesel and HVO
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Monthly prices from Jan 2003 until 20 July 2017Ja03 Ja04Ja05 Ja06 Ja07Ja08 Ja09 Ja10Ja11 Ja12Ja13 Ja14 Ja15Ja16 Ja17
100250400550700850
1000115013001450
RBD palm olein, fob MalaysiaSoya oil, Arg., fobCrude mineral oil
Monthly Prices (US-$/T)
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Soya Oil 24,6%Palm Oil 30,3%
Rape Oil 11,6%
Sun Oil 8,5%
PKO&CNO 4,4%
Others/An.Fats 20,6%
2016/17 -- 215.9 Mn T
Soya Oil 20,9%
Palm Oil 17,5%
Rape Oil 11,5%
Sun Oil 9,1%
PKO&CNO 5,3%
Others/An.Fats 35,7%
1996/97 -- 100.0 Mn TWorld Production of 17 Oils & Fats
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Importance of palm oil in global oils & fats market
Palm oil
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Current labour shortageis likely to reduce palmoil yields and OER‘s (oilextraction rates) belowpotential:
Longer harvest intervals, less loose-fruit collectionand delayed replanting
In the 10 years to 2016 wages for Malaysianplantation employeeshave increased by about100-130%, significantlyraising production costs!
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19801982
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19881990
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2016
0
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70MalaysiaIndonesiaRest of World
in Major Countries (Mn T) Palm Oil Production 1980 - 2017
Effects of El Nino
2016:-6% = -3.9 Mn T
1998:-5% = -0.8 Mn T
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O c t o b e r / S e p t e m b e r 09/10
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Production Supplies (op. stocks+prod.)Consumption
Change From Year Ago in Mn T17 OILS & FATS: Output, Supplies & Use
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E n d - S e p t e m b e r2001 2003 2005 2007 2009 2011 2013 2015 2017F
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1617 Oils & Fats: Stocks & Stocks/Usage
Stocks/Usage (%)
Stocks Mn T
Replenishment ofveg oil stocks will take time
and will not bepossible in 2016/17
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7017 OILS & FATS : World Production (Mn T)
Sun oil
Rape oil
Soya oil
Palm oil
9 Other oils
4 Animal Fats
The Dominance of Palm Oil - - grown on only 5% of Global Veg Oil Area
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Soy, Rape, Sun Oils4 Animal FatsPalm Oil 9 Other
17 OILS & FATS : World Exports (Mn T)
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The Success Story of the past 30 Years§ Substantial growth in world production of palm oil§ In 1980: 4.6 Mn T or 8% of 17 oils & fats§ In 1990: 11.0 Mn T or 14% § In 2000: 21.9 Mn T or 19%§ In 2010: 46.2 Mn T or 27%
§ In 2015: 62.8 Mn T or 30% (only 5% of area)§ In 2016: 58.9 Mn T (plus 6.4 Mn T of Palmkern oil)
§ In 2025 about 85 Mn T of palm oil required globally (of which Malaysia 24.0 and Indonesia 47.0 Mn T)
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Trade of 17 Oils & Fats in 2016
Exports Imports
EU-28 (14%)
China (10%)India (18%)
USA (6%)North Africa (5%)
Malaysia (22%)
Indonesia (32%)
Argentina (8%)
Russia & Ukraine (8%)
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2013 2014 2015 2016 2017J/M A/J J/S O/DJ/M A/J J/S O/DJ/M A/J J/S O/DJ/M A/J J/S O/DJ/M A/J J/S O/D
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ProductionConsumption
PALM OIL: Quarterly World Production & UsMn T
In 2016: Severeproductiondeficit
Big reductionof stocks
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Jan/June July/Dec12
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2015 2016 2017
INDONESIA : Palm Oil Output (Mn T)
15.6
13.9
18.2
17.1
18.517.8
Jan/June July/Dec6
7
8
9
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11
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2015 2016 2017
MALAYSIA : Palm Oil Output (Mn T)
9.0
9.7
8.7
11.110.9
7.6
In 2017 already 70% of the global production growth occurred in Jan/June, with Indonesia up 3.2 Mn T and Malaysia up 1.1 Mn T from year ago
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PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) P r o d u c t i o n Y i e l d s
2018F 2017F 2016 2015 2018F 2017F 2016 2015 Indonesia 38.00* 35.60* 32.10* 33.40* 3.79* 3.70* 3.51* 3.87*Malaysia 21.00* 19.86* 17.32 19.96 4.06* 3.92* 3.51* 4.18*
C&S America 4.75* 4.57* 4.04* 3.82* 3.19* 3.19* 2.99* 3.04*Africa 2.65* 2.55* 2.44* 2.38* 1.70* 1.68* 1.65* 1.66*
Oth ctrs. 3.54* 3.47* 3.00* 3.24* 2.58* 2.61* 2.29* 2.57*WORLD 69.94* 66.05* 58.90 62.80 3.57* 3.48* 3.24 3.62
PALM OIL : World Production ( Mn T ) and Yields ( T/ha ) P r o d u c t i o n Y i e l d s
2018F 2017F 2016 2015 2018F 2017F 2016 2015 Indonesia 38.00* 35.60* 32.10* 33.40* 3.79* 3.70* 3.51* 3.87*Malaysia 21.00* 19.86* 17.32 19.96 4.06* 3.92* 3.51* 4.18*
C&S America 4.75* 4.57* 4.04* 3.82* 3.19* 3.19* 2.99* 3.04*Africa 2.65* 2.55* 2.44* 2.38* 1.70* 1.68* 1.65* 1.66*
Oth ctrs. 3.54* 3.47* 3.00* 3.24* 2.58* 2.61* 2.29* 2.57*WORLD 69.94* 66.05* 58.90 62.80 3.57* 3.48* 3.24 3.62
World production seen up by 7.1 Mn T in 2017 and by 3.9 in 2018. Stocks of palm oil still down by 3.6 Mn T from year ago as of 1 Jan 2017.
Yields still relatively low+7.1 Mn+3.9 Mn -3.9 Mn T
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At the end of the season2002 2004 2006 2008 2010 2012 2014 2016 2018F8
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17 oils & fats10 oilseeds
World Stocks in Percent of Annual Usage (%)
Oilseeds: sideways orbearish, unless more weatherproblems occur
Oils & fats: At the end ofthe 2016/17 season, stocks still be low relative to annual consumption.
A second year (2017/18) without severe weatherproblems is required tobring oils & fats stocks tomore comfortable levels.
But this is a slow process.
Concluding Statements
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E n d - S e p t e m b e r2002 2004 2006 2008 2010 2012 2014 2016 2018F
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1617 Oils & Fats: Stocks & Stocks/Usage
Stocks/Usage (%)
Stocks Mn T
Replenishment ofveg oil stocks will take time
and will not bepossible in 2016/17
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June July JAS OND JFM AMJ560
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680
700
720nearby and deferred in US-$/T
RBD Palm Olein, fob Malaysia, June 2
108 $ inverse
Have we alreadyseen the lows forthe calendar year?
At prices below oraround US-$ 600 price-sensitive buyers alreadycovered at least part of theirrequirements
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Aug Sept OND JFM AMJ560
580
600
620
640nearby and deferred in US-$/T
RBD Palm Olein, fob Malaysia, July 24
The deferred positionsstrengthened, due to
- a slowing down of theproduction growth,
- still low stocks in many ctries,
- strong palm oildemand
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Daily prices from 1 Jan 2016 until 24 July 2017Ja16 Feb Apr Jun Aug Sep Oct Nov Ja17 Mar Apr May Jun
500
550
600
650
700
750
800
850
900Daily Prices of 2 Oils (in US-$/T)
RBD palm olein, fob Malaysia
Soya oil, fob Arg.
Palm olein currentlyabout US $ 100 belowsoya oil
Additional downwardmomentum is limited. But it cannot be excludedthat palm olein temporarily falls to orslightly below US $ 600 within the next 3-5 months.
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Prices from 3 Mayl 2016 until 25 July 2017May Jun Jly Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jly
220023002400250026002700280029003000310032003300
First position in Malaysian Ringgit/TMALAYSIA: Crude Palm Oil Futures Close Most of the bearishness in
the palm oil outlook isalready discounted.
There is still somedownward potential ifproduction in Jul/Oct 2017 comes up to expectations.
But additional pricereductions should belimited. I currently don‘texpect the first position tofall below 2300 Ringgit in Oct/Dec 2017.
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